Mexico's Cloud Market is on the rise, Projected to attract more than $1 Billion in investment by 2027

Mexico is fast emerging as a leading technology and data center market in Latin America, connecting data centers in various Latin American countries and the US via submarine cable connectivity. Previously valued at $632 million in 2021, the Mexico Cloud market is set to hit the $1 billion mark by 2027.

This immense growth is attributed to cloud adoption, AI implementation, the Internet of things, 5G network deployment, a gaming culture, digital transformation, and innovative city initiatives.

Google set to build a $1.2 billion digital infrastructure in Mexico

The Google Data Center will serve government agencies and private firms to enable the local storage of their data, unlike in the past, when data storage was outside the country.

The Google team believes that technology is a powerful enabler for enterprises, with the ability to create jobs and more resilient and sustainable economies. Innovation pathways and an entrepreneurial spirit can unleash immense economic opportunities in emerging markets. With this investment, software development in Google Cloud is expected to increase significantly throughout Latin America.

The Mexican Cloud Market is Part of the Bigger Picture

Once Latin America realizes its full potential in the cloud market, it could generate up to $1.37 trillion by 2030 in six of its largest economies, equivalent to 23% of the six countries’ combined GDPs.

Google has been investing in Latin America over the last 17 years, renewing its digital transformation with a five-year, $1.2 billion commitment to the Mexican market. The primary focus is on the areas:

· Software Development

· Digital infrastructure

· Digital skills

· Entrepreneurship

· Inclusive, sustainable communities

The sustained investments are also a bid to improve Mexico’s connectivity while increasing Latin America’s access to digital services, which include Google products like Search, YouTube, Gmail, and the Google Cloud.

Mexico’s Location is Highly Favorable.

Mexico’s proximity to the US makes it a good investment hub, with Queretaro the primary cloud center hub. The four third-party cloud facilities in Querétaro contribute to over 65% of Mexico’s existing capacity. US companies also find it helpful to have lower cost, same time zone resources in Mexico for technology outsourcing and collaboration with internal US-based teams.

Existing Demand for Digital Services has Driven the Demand

The demand for digital services has attracted giant companies like Google and Oracle, which offer cloud, big data, smart cities, AI implementation, IoT, and digitalization across Mexico, bringing Mexico closer to achieving its connectivity goals.

Telecom operators such as América Móvil’s Telcel and AT&T have also deployed 5G across Mexico. In addition, other companies, including HostDime, KIO Networks, and Amazon Web Services (AWS), are also deploying edge data center facilities in different locations across Mexico.

And with such a positive outlook on digital transformation, the region is set to attract more digital cloud investors.

Oracle’s Investment in Digital Cloud Infrastructure

Oracle is steadily expanding its digital cloud footprint with its latest dedicated cloud infrastructure in Mexico. The facility in the state of Querétaro will offer Oracle’s customers, partners, and developers in Mexico access to various cloud services with built-in security, competitive industry pricing, and disaster recovery.

Private and public organizations from different sectors, including telecommunications and financial services, will benefit from the Oracle Cloud Infrastructure.

High Availability Will Give Users a Resilient Cloud Foundation.

Next-generation cloud architecture has a high performance, offering a resilient foundation. The physical and virtual network design also maximizes performance and enhances security. For instance, each Oracle Cloud region has three groupings of hardware (fault domains) that are the logical data centers; these make the network highly available with resilience to hardware or network failures.

Companies and individuals that require speedy service will be able to develop products that meet their specific needs and help them offer better customer service.

Supporting Small Businesses and Startups

Tech entrepreneurship is gaining momentum throughout Latin America. After Google launched the Google for Startups in Brazil in 2016, more than 13 startups are valued at $1 billion. While formerly, there were none, this shows the value cloud computing services add to a business. And this effect is likely to be replicated in Mexico.

With Google for Startups’ investment, resources, and training, more than 450 startups in the region have received a boost from Google, raising billions of dollars and more than 25,000 jobs.

Once Google Cloud launches, it will join two other data centers in Latin America: São Paulo, Brazil, and Santiago, Chile. And Google is set to deliver high-performance, low-latency cloud computing services to customers in various industries.

The growth of cloud services in Mexico will help to accelerate the digital transformations of businesses, cloud-native companies, and organizations in the public sector.

Here are the Reasons Why More Businesses Are Opting for Cloud Services

Cloud adoption is mainstream, with most enterprise workloads already on the cloud. And there are plenty of reasons for this computing and data storage trend. Like other new technologies, cloud migration also has risks and drawbacks, although the benefits of using the cloud far outweigh such limitations.

Here are a few reasons Mexico is witnessing a rapid cloud migration among businesses of all sizes.

· The cloud provides better insights into big data.

Your on-premises data warehouse effectively supports advanced analytics solutions for rapid information processing. By migrating to the cloud, you access valuable insights from your data and make data-driven decisions to give you a competitive advantage.

· Cloud Services are flexible and Scalable

Depending on user bandwidth requirements, you can quickly scale cloud services up or down. And you won’t have to invest heavily in setting up infrastructure. The cloud is flexible, too, as it doesn’t tie you to a particular location. As long as you have an internet-enabled device, you can access, edit, or share your valuable data for strategic business decision-making.

· There’s a more efficient collaboration.

Cloud is highly efficient in the work processes. Multiple users of an organization can coordinate tasks and access the information they need simultaneously. Information sharing efficiency allows organizations to overcome geographic restrictions, enhancing collaboration and contributing to business growth.

· The cloud enhances business continuity.

Companies can easily recover quickly after an unforeseen disaster leading to data loss and downtime, allowing them to resume business operations.

Eliminating downtime is essential to business continuity and helps businesses remain competitive even after a data loss incident.

The Final Takeaway

According to market reports, Google and Oracle are the first companies competing for a share of the Mexico cloud computing market, but they won’t be the last. Microsoft and Amazon will likely join in, and Amazon is already scouting for the ideal place to set up a data center. It will be interesting to watch this space and how it will transform the cloud market in Mexico.