The dynamic nature of cloud computing is a key element of the model’s broad appeal to small and medium businesses (SMBs)
Cloud computing supports the kind of agile operations that all organisations need to achieve optimal competitiveness. Latin American small and medium businesses, particularly traditional small businesses with revenues of less than $20m, see the cloud as an instrument that will help free them from costly licensing, equipment, and maintenance expenses.
The cloud can also be the engine for business continuity and better security, as well as a means to lower overall risk. All of this would be difficult to achieve without leveraging an on-demand environment. SMBs need support in moving application workloads to the cloud in a cost-effective and secure manner.
Growth of SMBs in Latin America
Since the end of Covid-19 pandemic lockdowns, there has been tremendous growth in the number of new SMBs in Latin America. According to GlobalData research, in 2018, 225 capital-raising companies, indicative of startups, were founded. The number shot to 693 in 2021. In Mexico alone, there are 4.9 million SMBs according to National Institute of Statistics and Geography (INEGI).
SMBs and other organisations in the region are racing to the cloud to tap into on-demand compute services, storage, and the infrastructure to support AI-driven and other advanced applications.
GlobalData reported cloud revenues of $9.2bn in 2023 in Mexico alone. Cloud computing is projected to see a compound annual growth rate of 16.6%, reaching $19.7bn by 2028.
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By GlobalDataNavigating the cloud
The first SMBs to make the move into the cloud are the same companies that are usually on the leading edge of technology adoption. Some of the cloud-savvy organisations include digital natives whose businesses were literally born in the cloud. Independent software vendors and other tech companies were among the first to start the cloud journey.
Retail and financial services firms followed suit, as did organisations in the travel and entertainment industries. Services companies of all stripes are the next wave of cloud adopters. The popularity of SMBs that want to leverage cloud-native applications that Generative AI are expediting their migration to on-demand environments.
The benefits of cloud computing are apparent. Scalability, flexibility, cost, and fast access to the latest technology features translate into greater operational efficiency, productivity, and competitiveness across all industries. What has kept some SMBs on the fence with respect to cloud is their lack of expertise and expenses associated with migration.
AWS Activate lowering cloud costs in Mexico
Amazon Web Services (AWS) Mexico helps lower the cost barrier by offering SMBs credits to offset initial expenses. Through the AWS Activate program, SMB clients in the region can access $2500 in credits. To qualify, small and medium businesses need to have fewer than 250 employees and less than $70m in annual revenues.
SMBs are receptive to working with third-party partners to fill their skills gaps to make their cloud migrations successful. AWS offers current and existing partners, many of whom are also small businesses, training and incentives to support the creation and growth of their SMB practices. As part of AWS’ Zero to Hero program for new partners, many of which are SMBS, AWS co-sells with the affiliate to get a foothold in the sector. The Zero to Hero program provides training to gain experience with AWS’ services and acquire skills to derive the maximum benefit from these cloud solutions. The program incorporates a combination of educational resources, training programs, online coursework, and certifications.
Organisations also offer incentives to invest in technology and services through programs that encourage innovation, training, and development in Latin America. IDB Lab, the venture capital division of the Inter-American Development Bank Group, directs funding to support startups and encourage investment in innovations including cloud.
A surge in SMB movement to the cloud
AWS Mexico is invested in seeing further expansion in SMBs cloud adoption across Latin America. While there has been a surge in SMB movement to the cloud, 40% of small businesses in Mexico have not yet begun their digital transformations. This puts these businesses at a disadvantage as their competitors can gain faster access to new technology, lower operating costs, and unleash innovation. Many SMBs are using the same tools as their large multinational peers.
The sky is the limit for enterprising SMBs who effectively leverage the cloud to innovate and expand their businesses. The opportunity for partners who want to help in that journey is abundant.
To learn more please visit AWS Analyst Reports page: https://aws.amazon.com/resources/analyst-reports/?trk=a66cff23-6324-488f-8e77-5cc278104bb1&sc_channel=el
