Friday, July 10, 2015

If You Have to Jump a Big Ditch, Best to do so in a Single Leap

One good rule, when any firm is searching for revenue growth in new markets, is to pick a potentially big market, rather than a small one, and to choose a fast-growing market, not a slow-growing market.

In that regard, it is hard to fault the logic of focusing growth initiatives in enterprise areas such as cloud computing.

Cloud computing revenues are growing at rates between 20 percent and 40 percent, including security at perhaps 46 percent, analytics at 38 percent, storage at 36 percent.

Pyramid Research expects enterprise cloud service revenue in Latin America to expand from US$6.5 billion in 2014 to US$21.5 billion in 2019, growing ten times faster than telecommunication services, for example.  

Together, Brazil and Mexico accounted for 58 percent of the total enterprise cloud services revenue in LATAM in 2014, followed by the combined revenue of Argentina, Chile, Colombia and Peru at 24 percent.

That does not mean cloud is irrelevant for micro-businesses and small to medium-sized businesses (SMBs), which make up 99 percent of all businesses in Latin America.

Those segments might drive as much as 54 percent of overall enterprise cloud services revenue by the end of 2019.

Cloud services are about apps and content more than “voice,” services aimed at PCs, tablets or smartphones than “phones.”

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