Pandemic accelerates cloud adoption in Latin America

Nearly 40% of companies in the region plan to embrace the model, according to new research on trends in the region.

The Covid-19 pandemic has prompted decision makers across Latin American to boost IT spending in 2021, with 39% of organizations in the region planning to invest in cloud computing, according to research.

The changes imposed by the crisis meant that 68% of the companies surveyed in the the IDC Latin America IT Investment Trends 2021 study want to increase productivity by 2022, following by reducing costs (50%), retaining customers (41%) and introduce new products/services (36%).

"Between 2008 and 2015, increased productivity and customer loyalty were not on the priority list of companies that were led by cost reduction, but this has changed in recent years", said IDC Brazil's research and consulting manager Luciano Saboia.

In the context of these broader trends, hybrid cloud models are gradually becoming more prominent in companies' IT budgets, the analyst noted, using numbers from the largest market in the region, Brazil, to illustrate the ongoing developments. According to a separate study by IDC on hybrid cloud, 48% of companies in Brazil still use only the traditional data center as an infrastructure format.

The upside, according to IDC, is that 52% of companies use some type of cloud as part of their digital infrastructure, even if combined with the traditional data center. The firm said 51% of companies use more than one public cloud provider for IaaS (Infrastructure as a Service) and PaaS (Platform as a Service).

Regarding the future of digital infrastructure in Latin America between 2020 and 2024, IDC expects growth of 43% for IaaS, 11% for hyper-converged infrastructure and 4% for LCaaS (Local Cloud as a Service). By 2024, 50% of businesses in the region that are using Wi-Fi will adopt Wi-Fi 6, the analyst predicts.

According to the bi-annual survey carried out by the Regional Center for Studies on the Development of the Information Society (Cetic.br), the research arm of the Brazilian Network Information Centre (NIC.br), published last year, cloud adoption has grown across all sectors in Brazil.

Cloud-based storage in the country grew from 25% to 38%, the study noted. Enterprise software in the cloud has increased from 20% to 27% in two years between 2017 and 2019, as well as the use of cloud processing capacity, which went from 16% to 23% over the same period.

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