The Latin American cloud computing services market will expand at a 22.4% CAGR from 2019 to 2023. This will be driven by the increasing demand for hybrid cloud solutions in the infrastructure as a service (IaaS) and software as a service (SaaS) segments. The growing presence of global cloud solution providers such as IBM, Microsoft and AWS across local markets is key.
SaaS is currently the largest revenue generating segment, accounting for 49.9% of the region’s total. This is followed by IaaS accounting for 45.9% of the cloud market. Moving forward, we expect IaaS revenue in Latin America to expand at a 24.2% CAGR from 2019 to 2023. Local enterprises will accelerate their migration towards hybrid IaaS solutions, combining in-house infrastructures and private and public clouds with a multi-cloud business model. By 2021, we expect IaaS will overtake SaaS as the largest revenue generating segment in the cloud computing market.
Although its contribution to the cloud market is still relatively limited, accounting for a mere 4.3% of total cloud revenue in 2019, platform as a service (PaaS) will be the fastest growing segment. Its revenue will expand at a 30.1% CAGR. Growth will be mainly driven by large enterprises. These will be looking for secure platforms upon which to develop applications such as IoT, blockchain, and AI.