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August 23, 2011

Latin American Cloud Complications Persist

Nicole Hemsoth

Recent research from the Latin American side of the cloud computing market sheds light on potential problems the continent faces—from infrastructure to general perception—as it looks to clouds to solve IT challenges.

In some ways, the pain points are nothing new to hear about; they were (and in some ways still are) the dominant questions that companies in North America were asking a few years ago when the cloud computing fluff started to really fly.

The new report from Pyramid Research examined the opportunities that lie in the cloud for Latin American enterprises, but also recognized some of the many significant challenges in terms of security, privacy and service quality, not to mention general education about cloud computing.

The report, called “Why Cloud Computing Services are Good for Operators and SMEs in Latin America” was based on interviews and surveys with Latin American firms and sought to take the general temperature of the cloud climate in Mexico in particular. The study focused on enterprises of varying sizes as well as cloud computing service providers in the region.

While the providers surveyed, including Astel S.A.B. and Telmex were generally confident about their ability to reach out to Latin American enterprise customers in the coming years, there was a cooler response on the part of their potential users who expressed a wide range of concerns about clouds, not the least of which had to do with total cost of ownership (TCO).

Mercado claims that in Mexico and elsewhere in Latin America there is a high degree of suspicion about placing enterprise data in the hands of another company. Furthermore, he says that there are still a large number of firms that are confused about what cloud computing is and if there is any familiarity, businesses were unsure how it could benefit their bottom line over the long haul.

Senior analyst Jose Mercado, lead author of the report, said that “far from being an obstacle to the growth of cloud computing, the downlink speeds currently endured by the vast majority of smaller firms, which at less than 2 Mbit/s are quite low, actually present an opportunity for operators to bundle cloud services with better broadband offerings.”

Full story at Pyramid Research