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Frost & Sullivan: Analysis of the Brazilian Cloud Computing Market

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  • 1. Analysis of the Brazilian Cloud Computing Market Current Scenario and Future Outlook on Cloud Computing in Brazil Executive Summary 9855-72 February 2014
  • 2. 9855-23 2 Q&A Guilherme K Campos, Industry Analyst Frost & Sullivan guilherme.campos@frost.com Connect with me on social media: @GuiKatzor http://br.linkedin.com/in/guilhermekcampos/
  • 3. 9855-23 3 Contents Section Slide Numbers Executive Summary 4 Market Overview 6 Total Cloud Computing Market • External Challenges: Drivers and Restraints 8 • Forecasts and Trends 12 • Market Share and Competitive Analysis 15 The Last Word 20 The Frost & Sullivan Story 23
  • 4. 9855-23 4 Executive Summary
  • 5. 9855-23 5 Executive Summary • Revenue for the Brazilian cloud computing market in 2012 is $217.2 million in 2012. Revenue is expected to reach $1.11 billion by 2017 at a 38.7% compound annual growth rate (CAGR). • Cloud computing solutions, such as infrastructure as a service and software as a service, will show great growth over the next years in terms of revenue, because companies already know what they are used for. Platform as a service will also have a growth but its participation in the overall market will remain low, because clients are still learning what the service is for. • The aspects that are driving cloud computing adoption in Brazil are cost reduction, turning capital expenditure (CAPEX) into operational expenditure (OPEX) , the flexible environment giving options to increase or decrease the infrastructure according to the companies' needs, and the fact that the information will be available everywhere and be accessed anytime. • The aspects that are restraining cloud computing in Brazil are security, CIOs' fear of having information stolen or accessed by 3rd parties, connectivity, which is crucial for cloud computing, poor quality, and the fact that Brazilian companies are still not aware of the cloud computing concept. Source: Frost & Sullivan
  • 6. 9855-23 6 Market Overview • Although the Brazilian economy has not grown as quickly as expected in the last few years, especially in 2012, when the Brazilian GDP grew only 0.9% from 2011, IT services grew 9.9% in 2012 compared to 2011, reaching $ 6.45 billion. • Due to the weakened Brazilian economy, companies are looking for cost reductions and trying to outsource what is not their core business. Cloud is becoming an alternative for companies once it is no longer necessary to invest in CAPEX, since billing is based on usage. • The Brazilian cloud computing market is becoming more mature in terms of adoption by companies for cost reduction, agility in having access to information, and a focus on the core business. There are big demands for IaaS and SaaS. The market is now starting to demand some PaaS solutions. Source: Frost & Sullivan
  • 7. 9855-23 7 Drivers and Restraints Total Cloud Computing Market: Key Market Drivers and Restraints, Brazil, 2013–2017 Security H M M Connectivity H M M Lack of knowledge M L L 1–2 years 3–4 years 5th year Cost reduction H H H Flexible environment H H H Information available anywhere H H H Impact: H High M Medium L Low Note: Drivers & Restraints are ranked in order of impact. Source: Frost & Sullivan MarketDriversMarketRestraints
  • 8. 9855-23 8 Cloud Computing Assumptions • Revenue for the Brazilian cloud computing market in 2012 is $217.2 million in 2012. Revenue is expected to reach $1.11 billion by 2017 at a 38.7% CAGR. • The Brazilian SaaS market reached a total of $126.0 million in 2012 and, by 2017, is expected to reach $584.3 million at a 35.9% CAGR. • The Brazilian IaaS market reached a total of $84.0 million in 2012; in 2017, it is expected to reach $489.9 million at a 42.3% CAGR. • The Brazilian PaaS market reached a total of $7.2 million in 2012; for 2017, revenue is expected to reach $39.0 million at a 40.2% CAGR. Source: Frost & Sullivan
  • 9. 9855-23 9 Cloud Market Still has Great Opportunities With a CAGR of over 30% until 2017, companies need to be aware of the adoption trends to monetize on the opportunities. Source: Frost & Sullivan analysis. Possibility to have access to information anywhere, anytime through any device connect to the internet. Email, CRM and ERP are the most demanding services. Companies will build new datacenters locally and price reduction will drive most companies strategy. Web site hosting, storage and intranet hosting are the most demanding services Still not very used in Latin America, companies need to increase the awareness for this cloud service. Collaboration, Application Test and Applications development are the most demanding services. SaaS IaaS PaaS
  • 10. 9855-23 10 The Last Word—3 Big Predictions 2 SaaS will remain the biggest market in cloud computing, reaching $584.3 million by 2017. 3 Telecom operators will have a stronger presence in cloud computing due to important factors such as billing, customer support, infrastructure, and connectivity. 1 Cloud computing is still a nascent market in the Brazilian landscape; in the future, it will become better known among enterprises as the concept spreads throughout the market. Source: Frost & Sullivan
  • 11. 9855-23 11 Legal Disclaimer Frost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering or downloading, that Frost & Sullivan research services are for customers’ internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041
  • 12. 9855-23 12 The Frost & Sullivan Story
  • 13. 9855-23 13 Who is Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.
  • 14. 9855-23 14 What Makes Us Unique All services aligned on growth to help clients develop and implement innovative growth strategies Continuous monitoring of industries and their convergence, giving clients first mover advantage in emerging opportunities More than 40 global offices ensure that clients gain global perspective to mitigate risk and sustain long term growth Proprietary TEAM Methodology integrates 7 critical research perspectives to optimize growth investments Career research and case studies for the CEOs’ Growth Team to ensure growth strategy implementation at best practice levels Close collaboration with clients in developing their research-based visionary perspective to drive GIL Focused on Growth Industry Coverage Global Footprint Career Best Practices 360 Degree Perspective Visionary Innovation Partner
  • 15. 9855-23 15 TEAM Methodology Frost & Sullivan’s proprietary TEAM Methodology ensures that clients have a complete 360 Degree PerspectiveTM from which to drive decision making. Technical, Econometric, Application, and Market information ensures that clients have a comprehensive view of industries, markets, and technology. Technical Real-time intelligence on technology, including emerging technologies, new R&D breakthroughs, technology forecasting, impact analysis, groundbreaking research, and licensing opportunities. Econometric In-depth qualitative and quantitative research focused on timely and critical global, regional, and country-specific trends, including the political, demographic, and socioeconomic landscapes. Application Insightful strategies, networking opportunities, and best practices that can be applied for enhanced market growth; interactions between the client, peers, and Frost & Sullivan representatives that result in added value and effectiveness. Market Global and regional market analysis, including drivers and restraints, market trends, regulatory changes, competitive insights, growth forecasts, industry challenges, strategic recommendations, and end-user perspectives.
  • 16. 9855-23 16 Our Global Footprint 40+ Offices Scanning the Globe for Opportunities and Innovation