Frost & Sullivan: Analysis of the Colombian Cloud Computing MarketPresentation Transcript
Analysis of the Colombian Cloud Computing
Government Action and Service Provider Presence Inspire
Guilherme K Campos, Industry Analyst
Frost & Sullivan
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• Revenue for the Colombian cloud computing market was $31.6 million in 2012.
Revenue is expected to reach $196.5 million by 2017 at a 44.1% compound annual
growth rate (CAGR).
• Infrastructure as a service (IaaS), software as a service (SaaS), and platform as a
service (PaaS) will show aggressive growth in the next 4 to 5 years.
• The Colombian market is most willing to invest in SaaS that currently represents 57% of
the cloud computing market revenue, followed by IaaS with 41%. PaaS still has minimal
market representation due to companies not understanding its potential uses.
• Security is currently Colombian companies’ biggest concern, restraining them from
sending their information to the cloud. Law 1581, which took effect July 2013,
established data protection norms that must be followed by all providers.
• These actions will create a better sense of security among buyers. Vendors are also
investing in local data centers.
• The main aspect driving Colombian companies to cloud computing is cost reduction,
changing investments from capital expenditure (CAPEX) to operational expenditure
(OPEX). The option to increase or decrease services according to company needs is
another important driver for buyers, especially chief financial officers (CFOs).
Source: Frost & Sullivan
Drivers and Restraints
Total Cloud Computing Market: Key Market Drivers and Restraints, Colombia, 2013–2017
Security H M M
Lack of local data centers prepared for cloud computing M M L
Lack of knowledge M L L
1–2 years 3–4 years 5th year
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
Cloud computing is directly related to the business strategy of turning CAPEX into OPEX,
which is a great way to reduce costs. Instead of investing money in expanding capacity
and having to manage and control it, companies are willing to invest in cloud services.
The option to increase or decrease infrastructure according to the company’s needs is an
attractive driver, especially for CFOs.
Information Available Anywhere
The business model of cloud computing, together with mobility, enables companies to
have access to their information anywhere, anytime, and accessed by any device with an
Source: Frost & Sullivan
The main restraint to adoption of cloud computing is security regarding data protection.
With the increase of market knowledge about cloud computing and with changes within the
vendor offers regarding Law 1581, the impact of this restraint will decrease.
Lack of Local Data Centers Prepared for Cloud Computing
Most vendors do not have a data center in Colombia that offers cloud computing, but
usually purchase the service from Brazil or Miami. In 2013, vendors announced investments
in Colombia due to higher regional demand and to lower costs when compared to those in
Lack of Knowledge
Although much of the market already understands the concept of cloud computing, several
Colombian companies still do not know who the cloud providers are and what solutions or
services they offer.
Source: Frost & Sullivan
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