Cloud is Already a Determining Factor for Success in Business

Almost every conversation I have with a new potential customer begins with them telling me their interest in migrating to the cloud to reduce costs by outsourcing their IT infrastructure. It is a reality that cost is very compelling and a common conversation starter but the No. 1  reason that organizations are moving to the cloud is the agility and speed with which they can change their customer experience.

Basing the decision of migrating to the cloud solely on costs is a limited view. To be clear: the cloud is, first and foremost, a business enabler. 

The infrastructure-as-a-service (IaaS) model allows companies to pay only for the resources they use and to stop provisioning extra capacity, in addition to always having the latest technology available. According to Global Data, the IaaS market in Latin America will grow at about 24 percent CAGR from 2020 to 2025, reaching approximately US$5.5 billion by the end of the forecast period, which reflects the absolute potential of this technology

Beyond the infrastructure benefits, the cloud allows companies to collect and process vast amounts of information. It also provides powerful artificial intelligence and machine learning capabilities, which can contribute to improving decision-making and service levels.

In addition to that, it offers the possibility of innovating, creating solutions, testing new services, improving them, and launching those that will succeed in the market in a shorter time.

According to Global Data, Mexico is  ranked fourth for the highest deployment of cloud services in America, only behind the US, Canada, and Brazil. Enterprises, startups, and government organizations in the country are discovering the perks of having advanced technologies that allow them to create new products and services that meet the changing needs of their  customers.

Such is the case of Kavak, an innovative Mexican unicorn that has countless processes, from manufacturing to credit evaluation and documentation processing, that generates data and uses it to optimize its services and add value, paving the way for the future of car sales. The company leverages AWS’ artificial intelligence and machine learning services to accelerate the delivery of new functionalities and make the product suggestions that best meet its users’ requirements.

Organizations are realizing the benefits and impact of digital acceleration. Almost 60 percent of medium and large businesses in the region have increased cost efficiency through digitization, while 47 percent have introduced new digitally augmented products and services. This digitization, in turn, has enabled 46 percent of companies to derive greater value from their data, as well as better decision-making, in some cases generating new sources of revenue, according to the same source.

A cloud platform contributes to eliminating information silos, which, as a result, increases efficiency, improves agility, and speeds up innovation. Companies are now better positioned to create solutions, test new services, improve them, and launch those that will truly satisfy their customers' needs and have a better chance to succeed in the market. In addition, another valuable feature is the elasticity of the cloud, which helps speed up the acquisition and release of resources. With this, the infrastructure can be scaled down or up as demand fluctuates. Companies of any size can reduce the use of the cloud when demand is low and scale it exponentially when demand increases without compromising the service or customer service.

Cloud services have exponentially grown in Latin America. According to Global IT, the value of investment in this kind of infrastructure will reach US$7 billion in 2022, 25 percent higher than the previous year. The expectation is that this figure will grow to US$11 billion by 2025, with a compound annual growth of up to 7 percent.

The accelerated growth of cloud in the region indicates that companies in Latin America, including Mexico, are on the right track. However, it's not all about technology. Companies can adopt digital infrastructure within a few weeks but a digital transformation takes longer and it’s about people and culture. If it is done correctly and consciously, it can benefit human capital, since this will improve productivity, attract, and reduce talent turnover and achieve a correct and agile migration.

The biggest differences between organizations that talk about moving to the cloud and those that actually do it and are having the most success is often related to building a culture for change that includes the alignment and commitment of the senior leadership team by setting aggressive top-down goals to force the organization to move faster while training people on the cloud as part of the whole process.

The growth of the cloud in Mexico and Latin America is a result of the increasing awareness of the benefits it brings to organizations and their customers, making the cloud a new determining factor for the success of businesses.