Pyramid Points - Cloud Aggregation Platforms in LATAM
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Cloud Aggregation Platforms in LATAM

November 5, 2012

Multiple cloud aggregation platform solutions were presented recently at 4G World. Aepona’s API Monetization Platform was named the best Mobile Cloud Enabler in the Best of 4G Awards.

Michael Crossey, chief marketing officer at Aepona, told me he believes that cloud aggregation merchandise platforms are more than simple brokerage solutions for telcos. He said they also provide the right merchandising tools to allow telcos to effectively deliver cloud services to a massive number of SME companies. He added that telcos are in a prime position to sell and bundle cloud services with their core connectivity offerings to the SME market.

In order to maintain that prime position with the SME market, Pyramid Research believes that Latin America telcos will need to make several changes:

  • Cloud services profitability pools will need to be shared among all the market participants (e.g., over-the-top service providers, IT service providers, independent software vendors).
  • The cloud services value chain will have to shift from a direct sales model to an indirect sales model to allow for the massive distribution of cloud services. 
  • Telcos will have to avoid the temptation of develop all their cloud competencies in-house. They will have to rely heavily on partnerships to cost-effectively deliver cloud services to a massive number of companies.
  • Telcos will need to break down the walls between their mobile and fixed business units in order to cooperate and successfully introduce new cloud services that will allow SME users to flow from one environment to another without disruption.

In our latest thematic report, How the Latin American Telcos Tackle the SME Cloud Opportunity, we identified market entry strategies as a way for telcos to overcome what we call the CATCH situation:  

1. Churn pressure
2. ARPU pressure
3. Time to market pressure
4. Capex and opex pressure
5. High cost of new customer acquisition pressure

Pyramid Research believes that the adoption of the cloud aggregation model will be crucial for Latin American telcos wanting to prevent a CATCH situation. However, telcos in the region will need to make a significant effort in order to do so.

Pyramid Research forecasts that the Latin America SME market for cloud services will grow at a CAGR of 38% in the 2011-2017 period, to reach $12.7bn by 2017. The competition is strong and time is of the essence. Only those telcos that can adapt to new business realities will be able to achieve or maintain dominance in the Latin American SME cloud market.

— Daniel Ramos, Senior Consultant

Related resources:

How Latin American Telcos Are Tackling the SME Cloud Opportunity
Thematic Report published October 2012
This report provides a close look at the competitive cloud services offerings for the SME segment in seven selected countries in Latin America. Our diagnosis has helped us identify four market trends that are likely to evolve in the next five years.

Latin America Mobile Data Pricing Landscape and Trends
Telecom Insider published August 2012
This Insider examines what carriers are doing at a Latin America regional level in terms of pricing, to close the gap between revenue and data traffic growth. We focus on the major regional mobile markets: Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. The report concludes with case studies that illustrate some of the future trends analyzed in this report, a summary of key highlights and a set of recommendations.


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