America is the largest regional market in the global PaaS market, estimated to have a market share of 67.04% in total revenue in 2019 globally.
Increasing innovation in applications, growing use of online apps and services, increased use of smartphones in almost all computer-related services, and presence of major PaaS providers, and cost-effectiveness of adopting PaaS service is some of the major driving forces that are propelling the growth of America's PaaS market.
The U.S. dominated the Americas PaaS market with a revenue share of 67.04% in 2019. The leading market players of the cloud market, such as Amazon, Google, Oracle, Microsoft, Salesforce, and IBM are all situated in the U.S.. They are the undisputed leading region in the cloud market with cutting-edge technologies. According to cloud-based company Intricately.com, North America has the highest regional distribution in terms of cloud buyers, which was around 516,000 in 2019 and 485,000 in terms of cloud hosting buyers. According to the United Nations Conference on Trade and Development (UNCTAD), the geography of the digital economy is highly concentrated in two countries are the U.S. and China, in which the U.S. has around 68% of the market capitalization value of the world’s 70 largest digital platforms in 2019.
With growing organizational cloud adoption in the Americas that has resulted in complex environments, telecommunication companies in this region are intensifying their presence in the cloud space by acting as cloud resellers, offering managed services and supporting companies in managing hybrid and multi-cloud environments.
South America is the fourth largest in terms of cloud buyers and had around 107,000 buyers in 2019,
In terms of colocation data centers, there is a considerable gap between developed and developing countries. For instance, Africa and South America together account for only 5% of total colocation data centers. There is a substantial gap in terms of capabilities for harnessing digital data and frontier technologies.
Government initiatives, as well as regional initiatives to adopt digital technologies, are expected to create more opportunities for the South American PaaS market. For instance, the Development Bank of South America has created an observatory of the digital ecosystem in South America and the Caribbean. South America has displayed a stronger dynamism in the expansion of technology companies, creating specific terms of “technolatinas”, defined as technology-based private companies established in the South American region. Arrieta et al. recognized about 123 technolatinas worth more than US$ 25 million and nine enterprises worth above US$ 1 billion. Most of these companies were present in Brazil, Argentina and Mexico. According to UNCTAD, by April 2019, South America had 19 unicorns which are creating a high growth rate for the cloud market in this region.
In the Americas, almost all of the investment in terms of cloud computing is concentrated in the U.S. due to the availability of infrastructure and necessary digital and technical resources. U.S., along with China, have more than 75% of the market share in cloud computing, according to UNCTAD. The increasing use of cloud services can be known from the fact that most cloud traffic is generated in the Americas, which was around 6 Zettabytes in 2019, almost half of the total cloud traffic generated all around the world. In terms of colocation data centers also, the U.S. is dominating the world with a 40% market share and Canada has 4% share globally. Due to the access of such facilities, the U.S. is able to dominate the PaaS market as it can provide the necessary services worldwide. As PaaS is mainly based on the offering of platforms, the U.S. also is dominating in this category.The degree of digital platforms being originated is high in U.S.. For instance, according to Evans and Gawer, the majority of vendors who have a valuation of more than US$ 1 billion in terms of digital platforms from a variety of industries are based in the Americas.
The U.S. PaaS market was valued at US$ xx million in 2019 and is expected to reach US$ xx million in 2027. the market is poised to expand with a CAGR of 29.0% in the forecast period.
In terms of availability of data which is a major aspect of cloud computing, the U.S. has the most number of data companies, around 302,810 in 2017 with the value of data economy is around 113.67 billion euros according to IDC and Lisbon Council. The robust infrastructure of data availability is driving the growth of America's PaaS market. Canada, in turn, has strict government regulations in terms of data privacy and use, because of which regulatory requirements became the major inhibitor to PaaS adoption in Canada as there is an apprehension of being subjected to govt. regulations by large enterprises.
Still small and medium enterprises are increasingly adopting a hybrid approach as well as a pure PaaS strategy, which is driving the market. The Canadian PaaS market was valued at US$ XX million in 2019 and is expected to reach US$ XX million in 2027 with CAGR of 19.7% in the forecast period. In terms of public cloud revenue as a Percentage of Overall Infrastructure and Software Spending, Canada had 1.1% of share in cloud service in 2016, according to the Canadian Channel Chiefs Council. Yet lack of cloud infrastructure in Canada is the main reason behind slow public cloud adoption in Canada.
Given to the proximity to the United States, Canadian IT developers were able to access many of the early technology around cloud computing and even some of the initial case studies with providers who have been able to host data and compute resources in the local market. Additionally, at this stage, Canadian IT departments have only shifted about a quarter of their workloads into the cloud due to security issues. And most of the cloud users are preferring private clouds due to the presence of IT infrastructure and local data centers.
According to CIO Canada, the dominant cloud services are in comparatively low-risk areas, such as collaboration tools such as wikis and Web conferencing platforms, which nearly 40 percent of enterprises plan to move to the cloud within the forecast year.
In terms of SaaS adoption, there is a split attitude between enterprises, mainly in terms of the use of personal productivity software such as word processing, e-mail and spreadsheet programs. In spite of the relative maturity of software-as-a-Services such as Google Docs, IT managers are concentrating on other things for more tangible IT benefits.
Some of the leading cloud computing providers in Canada are Appstudio, Zazz, 7Edge, Apriorit.Inc, Alphonic Network Solutions, Nextbrain technologies and Relevant Software. In a recent industry survey on cloud adaptability, more than 50% of participants indicated that their cloud service usage would be higher than initially planned due to Other than that, due to Covid-19 pandemic, over 50% of respondents stated that their cloud usage would be more than initially planned.
In February 2020, Microsoft Canada declared that it is making substantial investments in the extension of cloud computing capacity in the two Azure regions that sum up the company’s Canadian presence. Such types of investment will strengthen the market of cloud computing in Canada. In terms of trend, both federal and provincial governments are increasingly adopting cloud by putting regulatory policies in place. For instance, Microsoft was one of the cloud vendors to attain Certification for Protected B data in Canada [This allows Federal departments to securely store, manage and process 2nd level sensitive data and applications.
Other than that, In the case of government, including federal and provincial government organizations, cloud computing demand is mainly driven by specific workloads which can be outsourced to the cloud.
In Mexico, the adoption of PaaS services has increased at the time of Covid-19 due to lock down and strict regulations. For instance, Oracle Exadata Cloud@Customer has helped the State of Querétaro of Mexico in its Covid-19 response. Oracle has developed an application that allowed the citizens and patients of the State of Querétaro, Mexico, to carry out a self-diagnosis in order to help evade the spread of infections. Mexico PaaS market was valued at US$ 2,334.02 million in 2019 and is expected to reach US$ 9,063.08 million in 2027 with growth rate of 18.4% in the forecast period. According to industry insiders, about 80% of enterprises in Mexico use cloud-based services either over private or hybrid cloud deployment models. In Mexico, the adoption of cloud computing is expected to increase due to growing IT spending by small and medium-size enterprises from public and private sectors on migration towards the cloud.
Most of the cloud computing providers in Mexico offer the best protection against cyber threats, yet it is crucial to evaluate their policies and regulations in terms of security and data management. Additionally, scrutiny about backup and flexibility provisions is also necessary to be evaluated. Some of the main cloud providers in this country are Perficient South America, Aldra I.T., Sabio Solutions, Convergia, Zivra LLC, CloudSourceIT and Sentinel.la.
Even if Mexico is situated next to the nation where the Internet and Cloud computing is developed, less than 13 percent of its 112 million inhabitants have broadband access. Adoption of Cloud services is growing and has the potential to lessen barriers to entry and to lower investment risks in various industrial sectors in this country.
Brazil has market share of 9.13% in 2019 due to the rapidly developing economy, increasing presence of start-up companies who depend on online to provide their services as well as the growing use of mobile-based applications in various industries.
For instance, according to the Lisbon council, the value of the data market in Brazil was 6.31 billion euro in 2017, along with 36,387 data companies. The growing data market is also producing demand for cloud services to manage a huge amount of data that are generated effectively.
The Brazil PaaS market was worth US$ XX million in 2019 and is expected to reach US$ XX million in 2027 with a CAGR of 16.8%.
In Brazil, the government supports the production of open-source substitutes. For instance, enterprise groups that get government funding to build software must use an open-source license.
According to the IT spending trend in Brazil, overall growth in IT spending is shifting towards Software-as-a-Service (SaaS) solutions due to the growing adoption of online services, which strengthens the overall PaaS market. Additionally, IBM is also expanding its data center in Costa Rica with over US$ 21 million of investment to enhance cyber-security services provided to its customers in Brazil.
But some initiatives taken by the Brazilian government may restrain some leading players in order to do smooth business. For instance, the country's General Data Protection Act (LGPD), which was applied in August 2020, is expected to force many organizations in the country to move their cloud access to private networks and to update their encryption services to enhance user data protection.
Since 2008, Brazilian enterprises have been extensively adopting cloud computing. According to IEEE computer society, until 2017, about 41% of enterprises in Brazil use cloud technologies. Decreased operational costs seem to be a primary driving factor of cloud computing adoption by industry in Brazil. Additionally, the requirement of innovating IT services; developments in productivity, customer services, and customer access; the adoption of policies based on IT services to improve business support; and rapid application deployment are other factors that bolster the PaaS market in Brazil.
Comparatively a fragile economy compared to developed countries, also one of the reasons growing adoption of cloud as it comes up with the advantage of the reduction in cost in terms of marketing, market-related operation and CRM.
Web service and databases are the dominating services provided in Brazil, followed by backup as a service, business intelligence and enterprise resource planning.
Another factor driving the market is connected to transactional applications, such as ERP and SCM (Supply Chain Management). Lastly, the growth of messaging and collaboration applications conforms to the requirement for more archiving as a service.
In Brazil, PaaS has been observed as the less-attractive service of the cloud market, with adoption only 39% compared to other services.
The Brazilian government has put forwarded several pilot projects focused on using cloud computing. For example, introduced by the Federal Data Processing Service (SERPRO) and Dataprev, Express Cloud is a free solution platform that has the intention of integrating all tasks associated with communication in public administration. Such types of initiatives are the major boosting factors for the PaaS market in this country.
In the Americas, other countries such as Argentina, Chile, Peru and Colombia, are also actively adopting PaaS services. For instance, Chile is considering the enactment of the Data Protection Law, which is aimed to further consolidate the current data protection regulations. The enactment of the act will result in the formation of a Data Protection Agency that will monitor compliance with the law. This in turn, will result in the adoption of PaaS identity and access management systems by enterprises.
Argentina is the second dominating country in South America due to the high adoption rate of portable devices such as smart-phones, laptops etc. According to the CEO of Cluster, a cloud provider based in Colombia, the fintech and multi-sector start-ups drive the innovative use of cloud computing. Still, other more traditional companies are more careful in their approach to cloud technology, but their mindset is changing when they see good results from early adopters of cloud technology.
The cloud market is still behind compared to other regional sectors. From the industry insider’s perspective, there are not many cloud consultants in South America due to there not being much promotion about the cloud in the entrepreneurship environment, universities, and international news. The South American market seems not yet ready for the cloud because of lack of required infrastructure, little experience on substantial benefit associated with the Business value related to the cloud, as well as the presence of a few Cloud data centers in South America (such as AWS, Azure, GCP).
In terms of PaaS computing adoption, Argentina is one of the most advanced countries in South America due to the presence of various leading PaaS providers such as Amazon, Microsoft and IBM. For instance, in 2019, Amazon has set up a new office in Argentina and is actively recruiting new employees there.
The government of Argentina is actively implementing policies for the quick adoption of PaaS services, simultaneously put forward rules to safeguard a large amount of data.
For instance, according to a study done by the independent think-tank BSA, in Argentina, the development of the regulatory environment for cloud services has been faster and according to the recent technological developments. The 2018 BSA Cloud Computing Scorecard gave Argentina 17th rank out of 24 major information economies globally when it comes to the adoption of an acceptable regulatory framework for cloud computing and the legal issues present with it, such as data protection, cybercrime and intellectual property protection (IPP). In June 2019, AWS declared that it would invest in an Amazon CloudFront Edge location in Buenos Aires, Argentina, that would be operational this year, offering low latency and high data transfer rates for Amazon customers to provide better services in this region. AWS has planned to invest approximately US$ 800 million over a decade in this new data center of Argentina. Such a huge investment will bolster the market growth of cloud computing in Argentina.
Additionally, The Argentine National Congress in 2019 passed the Knowledge Economy Law to promote knowledge and digital economy-based investments, including cloud computing that will be rewarded with tax incentives which include a discount in the income tax rate to 15 % from 35 %.