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Brazil Cloud Services Market to be Worth $1.11B in 2017: Report

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Brazil’s cloud computing market, worth $328.8 million in 2013, is estimated to reach $1.11 billion in 2017, according to new research from Frost & Sullivan.

According to Frost & Sullivan’s new report, “Analysis of the Brazilian Cloud Computing Market,” the country’s slow economic growth actually spurs businesses to use usage-based cloud computing solutions to increase flexibility and save on capital expenditures.

Brazil is likely to sign into law new regulations this month on the handling of user data, and, understandably, citizens are concerned over services provided by third parties.

Frost & Sullivan ICT industry analyst Guilherme Campos said in a statement, “Owing to the lack of awareness, companies are reluctant to give third parties access to their information, especially after the news of data espionage in the United States broke.”

Many also worry about the availability of outsourced services, reasoning that connection interruptions (due to Brazil’s relatively poor connectivity) could prevent users from accessing information when it’s needed.

There are, however, signs that the nascent Brazilian cloud computing market is maturing, according to Frost & Sullivan. There is already significant demand for Infrastructure as a Service, and Software as a Service. Platform as a service is also rising to prominence as end users understand its value.

Small and medium-sized businesses are particularly gravitating to IaaS for storage and backup, and to reduce e-commerce costs due to seasonal market differences.

Brazilian legislation around internet services that is expected to pass later this month was amended to drop a requirement that Brazilians’ data must be hosted within Brazil. This is expected to allow more companies to provide services to the Brazil market without them having to invest in infrastructure located in Brazil.

Companies that have been ramping up their cloud efforts in Brazil. Last year, Microsoft had announced plans to open a Windows Azure Region in Brazil in early 2014 (although it has yet to materialize). And web host GoDaddy is offering its full suite of hosting services localized in both Spanish and Brazilian Portuguese in order to appeal to Latin American customers.

The report asserts that as market knowledge grows, many of the concerns around cloud computing will diminish, supporting market growth.

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