By Robert L. Scheier
The cloud is big and getting bigger, especially in Latin America. Remote infrastructure management, security and the development of customer-facing applications are hot opportunities for service providers who can meet its new demands.
Companies in Latin America and Asia Pacific are running a much higher proportion of cloud applications (those running in highly virtualized , flexible environments) than their counterparts in other geographies, according to a Tata Consultancy Services survey of senior managers and corporate IT executives from over 600 large companies across the globe. Currently, an average of 39 percent of all applications in the region are cloud-based, a proportion expected to increase to 59 per cent by 2014.
Although reduced costs come to mind first when many customers think of the cloud, the most important driver cited by Latin American firms was the ability to quickly ramp systems up and down as the business needs for them change. Also high on the list were the ability to quickly launch enhancements or experiment with new applications that have the potential to increase revenue and/or profits. In fact, the Latin American companies surveyed reported a 32 percent average revenue gains from their new, cloud-based products and services.
With this much demand and this level of business benefits, there are at least five cloud markets where Latin American providers can shine.
1) Remote infrastructure management (monitoring, tuning and troubleshooting of servers, network and storage from a remote site), ideally for less than what it would cost a customer to perform internally. What customers want here (besides excellent and low-cost service) are features such as real-time dashboards that report on the health of their IT environment in business terms they can understand. That is because IT executives must not only be able to deliver business value, but to prove they are delivering it.
2) Cost-effective cloud-aided disaster recovery. Fewer organizations these days can justify expensive standby “hot” sites full of computing gear just waiting to take over in case of a disaster. More and more companies are instead using the flexibility of the cloud to quickly push less critical test/development or QA loads off servers in case of an outage, running production apps on that hardware until the outage is over. Smart providers who can offer this reduced-price DR (perhaps along with remote infrastructure management) can paint a compelling cost-justification story to customers.
3) Security for the cloud, which the study showed to be one of the main obstacles for adopting and benefiting from cloud applications. The businesses I talk to want verifiable proof that their cloud-based systems and data are being protected with the proper configuration and other security measures. This, again, speaks to the persistent demand for accountability and measurable results.
4) The use of open source software and frameworks such as OpenStack to make it easier for customers to move applications and data among multiple public and private (or internal) clouds. This helps provide the flexibility that ranked so high among customers in the TCS survey. As the use of these frameworks expands beyond early adopters such as hosting firms, enterprises will need help evaluating and implementing them – as well as the 24/7 expert support that may not be available from a “volunteer” open source community.
5) The final sweet spot is customer-facing applications, which according to the TCS survey are getting the largest share of the cloud application budget. This is a natural fit for Latin American development houses that tap the creative and graphical skills of their staffs, as well as their feel for the needs of local markets. Young, aggressive start-ups who are already using the latest development tools to build edgy multimedia applications (a growing focus for Guadalajara) can get into the enterprise market by putting a customer-friendly face on cloud applications.
However you define it (public cloud, private cloud, Infrastructure as a Service, Platform as a Service or Business Process as a Service) the cloud is an increasingly big draw in Latin America. The shift to this more dynamic, elastic, and cost-effective platform gives new, and current, service provider a new battleground on which to joust.