AWS places its bets on Brazil

The cloud computing firm wants to play a key role in the strategy of cash-strapped customers and increase its influence locally.
Written by Angelica Mari, Contributing Writer

Cloud computing giant Amazon Web Services (AWS) is looking to use the current customer cost-consciousness to grow its business in Brazil and increasing its influence in the local technology community.

Differently to other companies that are taking a bolder approach and announcing investments in Brazil at a time of economic instability, AWS is favouring a growth approach that focuses on building relationships.

Following the introduction of its infrastructure in Brazil in December 2011, the company has working more individually with local customers since the appointment of Jeff Kratz as managing director for Latin America in January 2015.

According to the worldwide public sector vice president at AWS, Teresa Carlson, who came to Brazil last month to meet key customers and prospects and speak at the company's flagship summit, the firm has seen real business momentum in the country, due to the uncertain economic climate and the recent government budget cuts.

"There is a fantastic desire to take advantage of cloud in Brazil, for reasons that include the budget cuts and generally the ability to really try to get more for your money," Carlson told ZDNet in São Paulo.

"And I think what customers are seeing is the fact that by exploiting the cloud not will they get more for their money, but also be much more innovative in terms of providing solutions and services to citizens as well as creating more economic opportunities," she adds.

AWS doesn't disclose revenue targets, but its senior management is clear about the intentions to boost the take-up of its services in Brazil.

"What we are really looking for when it comes to targets in Brazil is [an increase in] adoption. Customers actually are adopting the cloud because at the end of the day, we continually reduce our prices," Carlson says.

"And if we can point to our customers and say that they have transformed their businesses and significantly reduce their cost with the use of AWS and cloud, that's what gets us excited because we have a long-term view of the business," she adds.

Carlson points out that while AWS is sensitive to the economic challenges in Brazil, the company benefits from having experienced that before in several markets worldwide.

"We have the opportunity to see when economies are moving up. And unfortunately we also see when economies are not doing as well," the executive says.

"Right now, what we see for Brazil is that there's a massive opportunity to utilize cloud computing to create an economic opportunity for jobs, education, growth, innovation," she adds.

Great expectations

Carlson says the focus in Brazil is to educate decision makers about the company's offering and that interactions with current and potential clients have been "very open and transparent," particularly in the public sector.
Teresa Carlson, VP worldwide public sector, AWS: "We are in Brazil for the long run"

"I found those meetings very refreshing because [government officials] are straightforward about the budget cuts, as well as things they need to do. I think that's all very positive for the country," Carlson says.

Such promising conversations included a visit to the governor of Brazil's capital Brasília, who has publicized his interest in building a partnership with the cloud services provider in supporting new initiatives in transport, education and transparency.

"The meeting was very positive, especially because we're very new in Brazil for the public sector. That doesn't mean we don't have customers taking advantage of AWS already, but now we're building up a team. We have hires here and we're continuing to invest in the public sector," Carlson says.

"We are in the education phase and working with [public sector bodies] to help them think through how AWS could really be a key part of their solution and a game-changing element of their portfolios," she adds.

Frost & Sullivan research suggests the Brazilian cloud computing market should see a jump in market revenues from $328.8m in 2013 to $1.1bn by 2017. According to Carlson, the bullish trend is helped by a shift in the software licensing model. She adds that during conversations with government customers, it became apparent that public sector users no longer want to buy a vast number of individual software licenses that they never use.

"[The cloud model] is a great opportunity because public sector users don't want to bear the high cost of licensing fees and that was clear to me," the executive says, adding that many government agencies in Brazil can't track the use of software licenses well.

Being able to deliver services to citizens more quickly is another requirement that government users have highlighted during conversations with AWS executives.

"They see cloud as an enabler to help their citizens. We didn't talk about budget around those conversations, though. It was much more a customer, citizen-driven conversation, things that people are asking for that need a solution," Carlson says.

According to Carlson, even though AWS' operations are quite recent in Brazil, the brand Amazon has opened doors in terms of willingness from decision makers to do business with the company.

"When you have the brand and all the customer references that we can show, plus partners and analysts talking about it, it makes people think we are doing what should be done and that they should try our solutions."

Getting closer to the community

Another way in which AWS is looking to get better known in Brazil is by bringing its education programs to the country. One such initiative is AWS Activate - a free program that provides startups with resources for working with the company's cloud-based tools.

The city of Florianópolis in southern Brazil is one of the public sector bodies currently using AWS Activate to educate more than 500 startups fostered by the Startup SC program on topics such as economics, marketing and social media using cloud-based tools.

According to Carlson, the idea is to replicate the work that has been done in Florianópolis and introduce Activate to any government-sponsored start-up initiative.

"I love the idea of taking a commercial kind of program to a government initiative and mashing those together very nicely to create a program that allows for job creation," she says, adding that the program could be extended to the small and medium enterprise space.

"We see that if we can apply the same kind of thinking to the small and medium enterprises, it could be a phenomenal opportunity to create a model that can be replicated across Brazil."

Another program that will be brought to Brazil is AWS Educate, which is geared towards training for functions related to cloud computing. The company is now seeking partner institutions that might want to implement the content into their curricula.

Since Pronatec - the Brazilian government's project to train entry-level professionals in technology roles - has been affected by the recent budget cuts, Carlson suggests that AWS could help re-shape the program.

"Maybe we can convince [the Brazilian government] that they need to rethink that project. There is no job in the future that will not have some coding and development and our goal is to educate people on high-level IT capabilities," the executive points out.

Carlson is also a passionate advocate of gender inclusion in IT and will be looking for local partners to drive her project Smart is Beautiful to get young women interested in technology careers.

Expected challenges

AWS currently has clusters of datacenters spread across regions worldwide, including Brazil, the eighth launched by the company worldwide. Within this regional cluster there are three availability zones, isolated locations within regions connected by low-latency links that serve South America.

According to Carlson, the company will continue to boost its local set-up in terms of infrastrcture and tools.

"You'll continue to see us add resources both in sales, marketing, PR, solution architects, technical support, business development support. So we'll deploy more resources as needed to support the environment," she says.

Carlson expects that as local adoption rates go up, there will also be challenges.

"Through experience we know that it's either going to be some [new] policy that we need to work with the legislators on - and we do that all the time. It could be that the acquisition officials aren't well versed on how to deal with our models for cloud. We'll just have to go in and address that," she says.

"However, each and every agency we work with around the world goes through [challenges] and we face some of those, but we've not yet found one we can't get through: we're very tenacious and we don't run away from our problems," Carlson adds.

"It's a journey, and we are committed to get there. And we are not here for the short run. We are here for the long run."

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