About Frost & Sullivan
• Frost & Sullivan is a global growth consulting company that partners with clients to support
the development of innovative growth strategies.
• For more than 45 years, we have leveraged our comprehensive market expertise to serve
an extensive clientele that includes Global 1000 companies, emerging companies, and the
investment community.
• We offer industry research and market strategies, provide growth consulting and corporate
training, and support clients to help grow their businesses.
Agenda
1 - What is going on?
2 - Understanding the Cloud
3 - Cloud Computing: the real scenario
4 - Cloud Computing: a look ahead
5 - Competitive Landscape
6 - Final Words
1 - What is going on?
Economical stability in some countries will leverage IT investments in
the region
• IT Investments are direct linked with
external factors.
• Those same external factors are direct
linked between them.
• The same holistic overview is more and
more moving towards a global perspective,
getting out of the local landscape.
• Technology is key for short, medium and
long term growth!
After a slow year, the horizon is promising to the region
• The macroeconomic consistency presented by some countries in the region before the global
economic downturn in 2009, was an important factor that decreased the impact in the region.The
proximity and dependency of Mexico to the US was strongly felt and the country that presented one of
the lowest GDP growths in 2009.
And the IT department is always facing the same challenges
• Constant pressure to reduce
costs.
• Increase operational efficiency.
• Fastness in solutions
implementations.
• Optmize the use of IT to
leverage business.
• IT aligned with the core
business of the company.
Technology was a fundamental piece in the cost saving objectives of
companies in 2009
•
•
•
•
•
Virtualization
IT Infrastructure Outsourcing
Software as a Service
Unified Communication
Cloud Computing
• Adecuacy on long term contracts
• Reduction on ITbudgets
• Postpone of someIT projects
• Strong impact on small and medium business.
• It is evident that company's Chief Financial Officers (CFOs) will have greater control over IT investments.
Hence, there will be a clear predilection over investments in IT areas that have direct consequence in reducing
costs and increasing revenues and profit margins.
2 – Understanding the Cloud
Cloud Computing encompasses major advantages from other past
IT architectures and services
Cloud computing is a flexible and scalable shared and/or private environment in which third-party suppliers or
in-house architectures use virtualization technologies to create and distribute computing resources to customers
on an as-needed basis, via the Internet browser.
Cloud Computing Characteristics
IT Architectures
Pay per Use
Browserbased client
Distributed
computing
Cloud
Computing
√
√
√
Utility
Computing
√
√
• However, due to its emergent stage and
√
Software as a
Service
√
Platform as a
Service
√
Web Services
Computing is the ultimate evolution of a series
of environments and technologies.
Grid Computing
Virtualization
Tecnologies
• More than a technological revolution, Cloud
√
current restraints, the original concept of cloud
computing suffered adaptations by providers to
address clients’ needs.
An impressive 32% of the companies in Mexico had an excellent
understanding of the Cloud Computing concept
Market Knowledge and
Awareness – Latin America
Low
7%
Excellent
20%
Market Knowledge and
Awareness – Mexico
Low
3%
Fair
17%
• IT executives in Mexico have a higher
understanding regarding the cloud
Excellent
32%
computing concept in comparison to the
rest of Latin America.
Fair
27%
• Some top reasons for that is the general
maturity level regarding IT and some early
Good
46%
N = 110. Source: Frost & Sullivan
adoptions leveraged by multinational
Good
48%
N = 40, Source: Frost & Sullivan
companies established in the country.
3 – Cloud Computing: the real scenario
The economic unrest experienced in 2009 made CIOs want to know
more about Cloud Computing
Current Market Adoption –
Latin America
• Despite of a higher knowledge over the
Current Market Adoption –
Mexico
cloud computing concept in Mexico, this is
not reflected on the adoption rate, as the
penetration of the technology is very similar
Not Adopted yet
53%
Already
Adopted
47%
Not Adopted yet
50%
Already
Adopted
50%
to the rest of Latin America.
• Nevertheless, large enterprises in Mexico
are strongly engaging into the cloud
N = 110. Source: Frost & Sullivan
N = 40, Source: Frost & Sullivan
computing concept and adoption rate for
the short term is likely to increase 30%.
The concept of cloud computing encompasses significant promises
Current Market Adoption – Mexico
Not Adopted yet
50%
Already
Adopted
50%
N = 40, Source: Frost & Sullivan
• Cloud Computing adoption is still very fragmented among verticals. Nevertheless, there is a clear current
adoption acceptability from three main verticals: Industry and Manufacturing, Banking and Finance, and IT
and Telecom.
• The government sector still has some security and privacy issues that restraints the adoption of cloud
computing toward further solutions and services.
Whilst public clouds suit small and medium companies’, enterprises
demand private environments
Current Market Adoption – Mexico
Public Clouds
5%
Not Adopted yet
50%
Already
Adopted
50%
Hybrid Clouds
30%
Private Clouds
65%
N = 40, Source: Frost & Sullivan
• Due to the emerging stage of the cloud computing trend in the region and also globally, the majority of
enterprises that already adopted the model, preferred the private one (either outsourced or developed inhouse).
Likewise in other countries, Mexican enterprises are starting the
cloud adoption in the application level
Current Market Adoption – Mexico
Not Adopted yet
50%
Already
Adopted
50%
Application
Platform
85%
30%
N = 40, Source: Frost & Sullivan
Infrastructure
60%
• Driven by marketing efforts and also available offers, enterprises in Mexico have started the cloud
computing adoption by the application level.
• Platform utilization is still low and very punctual. Within the infrastructure level, companies are expected
to increase the cloud adoption in the short term.
Database solutions was by far the most participative with an 82.4
percent penetration
Top Cloud Computing Solutions
and Services - 2010
• Database
• Email
• BI (Business Intelligence)
• Application Testing
• Storage
• Website Hosting
• Intranet Hosting
4 – Cloud Computing: a look ahead
Security is King to the enterprise segment
Current Market Adoption –
Mexico
Future Market Adoption (2011
and 2012) – Mexico
Not Adopted yet
35%
Not Adopted yet
50%
Already
Adopted
50%
Already
Adopted
65%
• With 65.0 percent of companies
planning to adopt or expand their
Cloud Computing architectures in 2011
and 2012, this IT trend is clearly going
to witness significant growth in the
short-term in Mexico.
N = 40, Source: Frost & Sullivan
• Noteworthy highlights to the intent of adopting Public Clouds, with 19.2 percent penetration, and hybrid ones
where companies can reap the advantages of public Clouds for some processes, while maximizing the
security and privacy of their operations by also having private Clouds in place.
Security is King to the enterprise segment
• Most of the major factors driving adoption of the
Cloud Computing concept by companies in Latin
America & Caribbean are the same ones that
boost more mature markets such as the USA and
Western Europe.
• Security is the top reason cited by enterprises for
avoiding Cloud solutions. In some cases, the
concerns are legitimate: clearly, anytime a
resource is shared, there is greater risk of
unauthorized access and contaminated data.
Cloud Computing providers still have key challenges to overcome in
this market
5 – Competitive Landscape
Quality is already an integral part of the offer and decision making is
beyond the IT department
Key Attributes Considered in the Selection
of a Cloud Computing Provider - Mexico
• For the Mexican enterprise segment,
security is king. With 77.5 percent
penetration, security is the most important
characteristic considered in the process of
selecting a Cloud Computing provider.
• Growing importance of the chief financial
officer (CFO) over IT strategic plans and
short-term investments. Most IT service
providers and vendors have been trying
extremely hard to customize their go-tomarket strategies in order to address the
CFOs and creating tools to show return on
investment (ROI).
Global players are the major participants within the cloud computing
market
• Partnerships among IT service providers
and application developers are expected to
keep growing within the cloud computing
landscape. This is key to build up an
integral cloud computing solution.
• Telecom service providers are still not
perceived as cloud computing players by
end-users neither in Mexico nor in most
part of Latin America. This scenario is likely
to change in the short term.
6 – Final Words
IT Service Players have to Shift from Providers to Partners
1 – Understand your client’s business! The
CFO wants to see the return over the
investment.
2 – Security, Price, and Market Experience.
Those are key attributes to focus on. Quality
is already default.
3 – Focus are on: e-commerce and storage
(infrastructure), ERP, CRM, and BI
(applications), application testing (platform).
Marcelo Kawanami
ICT Industry Manager
Phone: +55 11 3065 8448
Email: [email protected]