Nearshore Americas

Verizon to Educate Latin America on the Benefits of the Cloud

When people think of Verizon, they usually have in mind the US-headquartered broadband and telecommunications behemoth that grew out of Bell Atlantic – one of the famed ‘Baby Bells’ – to become a component of the Dow Jones Industrial Average. But the company’s global scope also includes enterprise solutions in Latin America, with a specific eye to the region’s biggest market, Brazil.

“I am moving to Brazil in two weeks,” says Rafael Rivero, the LatAm Managing Director at Verizon Enterprise Solutions. “We see that market as presenting a big opportunity, along with Mexico, Colombia, and Peru.”

The big shift began for Verizon back in April, 2011, when it closed on its $1.4 billion acquisition of Terremark Worldwide, which has data center network access points (NAPs) in Brazil and Colombia.

“From these sites we can offer cloud services and co-location for our enterprise customers in Latin America,” says Rivero. “Typically these are global customers leveraging our worldwide IP network, but they can include what are called the ‘multilatinas’ – big Latin American firms conducting global business out of the region. And often, those headquarters are in Brazil.”

Strategic Partnerships

To enhance its competitiveness in the enterprise market in LatAm, Verizon Enterprise Solutions has a memorandum of understanding with the German ERP vendor SAP that outlines plans to deploy the SAP HANA platform in its data centers in Colombia and Brazil. Earlier this year Verizon also inked a deal to use Oracle Database and Oracle Fusion Middleware on its cloud infrastructure, allowing for payment on an hour-by-hour access basis.

“The agreement with Oracle gives our customers flexibility,” says Rivero. “From a demand perspective, we are seeing a lot out of our Brazilian data center in Tambore, a suburb of São Paulo. This is a premium facility, and we are adding capacity.”

As it stands, the Tambore data center is 17,250 square meters, with 3,400 square meters of co-location space. Crucially, this data center has a high capacity direct connection with Verizon’s NAP for the Americas in Miami, where more than 160 carriers are available.

“Verizon’s global network complies with one standard for security, and cloud, and network services,” says Rivero. “The fifteen countries in the region can access our IP network as well, and benefit from the fact that we have to comply with international and US regulations.”

Schooling the Cloud

That all sounds well and good, but Rivero is clear that in Latin America – even in big markets like Brazil – the potential customer base can still be surprisingly unsophisticated when it comes to understanding what the cloud can accomplish. This is surprising given that cloud offerings and pay-as-you-go-services are ideal for those organizations that don’t have the capex, or want the headache, of investing in their own infrastructure, as well as in the personnel required to maintain and upgrade it.

“My experience in Brazil suggests that a lot of education is needed,” says Rivero. “As a result, we conduct small workshops with our clients that show what the cloud means, what its impact is, how to use it, what the opportunity is, and how we are investing in the cloud in the region.”

Rivero notes that by some estimates the regional multilatinas are growing at 10% to 11%, with a lot of that being organic, but also including global acquisitions. And this is occurring despite the significant sell-off seen in emerging markets in February. Mexico’s Grupo Bimbo, for example, announced the purchase of Canada Bread Company for $1.66 billion in the midst of the turmoil.

“These are the kinds of global opportunities that appeal to us,” says Rivero. “In the last five years Verizon has invested about $80 billion in its global infrastructure. That’s an indication of our level of commitment.”

Variation Among Verticals

When looking at the opportunity in LatAm, Verizon is aware that not all industries represent the same level of opportunity.

“We see manufacturing as a big opportunity, and retail is also extremely important.” says Rivero. “However, financial services tends to want to control their information more closely, and we have yet to explore the public sector. That said, we expect to look at the public sector in the years to come.”

Verizon is also looking at building its human resources throughout the region, and not only in the context of its data centers in Brazil and Colombia.

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“Brazil is growing, but we are also hiring in smaller markets in Latin America, such as Peru,” says Rivero.

Verizon’s growth in Latin America is made possible in large part due to the company’s shift, announced in October of last year, to provide Infrastructure as a Service (IaaS) as part of Verizon Cloud. The appeal of this offering – which has two components: Verizon Cloud Compute and Verizon Cloud Storage – is that it allows Verizon to offer enterprise services to smaller, growing companies. In effect, it allows Verizon to move horizontally across sectors, and appeal to a huge, untapped market.

John Stratton, president of Verizon Enterprise Solutions, has called this a “revolution” in cloud services, with virtualized environments adding great speed and flexibility to the deployment and management of computer resources. But the challenge remains: for Verizon to take advantage of its investments in Latin America, it will need to reach out and educate a potential client base that, so far, has remained largely ignorant of the advantages offered by cloud services.

Tim Wilson

Tim has been a contributing analyst to Nearshore Americas since 2012. He is a former Research Analyst with IDC in Toronto and has over 20 years’ experience as a technology and business journalist, including extensive reporting from Latin America. A graduate of McGill University in Montreal, he has received numerous accolades for his writing, including a CBC Literary and a National Magazine award. He divides his time between Canada and Mexico. When not chasing down stories, he is busy writing the Detective Sánchez series of crime novels.

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