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Google Eyes Cloud Development in LATAM: Rivals on Its Radar

Shilpa Mete

Alphabet’s GOOGL Google division is gearing up to expand its cloud business in Latin America (LATAM) through aggressive recruitment.

Reportedly, the search giant is aiming to propel a threefold increase in its cloud workforce by next-year end. By expanding cloud workforce, the company intends to ramp up its operational efficiency, which in turn, is expected to deliver better customer experience.

Google Cloud’s team has already started penetrating countries like Brazil, Mexico, Chile, Argentina and Colombia.

We note that the company’s urgency to strengthen its workforce bodes well for its continued efforts to fortify its footprint in the LATAM cloud market.

Growing Initiatives in LATAM

Google Cloud unit is making all the right noises to leave a mark on LATAM’s cloud platform.

Apart from the latest workforce measure, the company is planning to invest $140 million in its Chilean data center located in Quilicura, Santiago. Notably, this plan is in addition to the company’s initial investment of $150 million.

We believe, the additional capital infusion will expand the company’s storage capabilities and the size of its data center. This is likely to add stimulus to its cloud services.

Moreover, the leading search engine proposes to create 120 new permanent jobs and more than 1,000 new jobs in the construction process with its investment plans, thus benefiting the society.

Additionally, the company is a member of Chile’s Large Synoptic Survey Telescope (LSST), which will come online in Cerro Pachon in 2022.

Google Cloud also has three regions in LATAM with the newest one located at Sao Paulo.

Alphabet Inc. Price and Consensus

Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

 

Intensifying Cloud Competition in LATAM

Growing adoption of IoT, AI and big data within the cloud infrastructure remains the key catalyst in the infrastructure as a service (IaaS) market in LATAM. Per a Frost & Sullivan report, this market is anticipated to reach $7.4 billion by 2022 at a CAGR of 31.9%.

Given this upbeat scenario, we note that not only Google but also Amazon AMZN, IBM IBM and Microsoft MSFT are ticking all the right boxes to widen their presence in LATAM.

Amazon Web Services (AWS) intends to invest $800 million in building a regional data center within a free-trade zone in Argentina. Further, it recently selected Buenos Aires as the new location to set up its seventh Edge location in LATAM. Additionally, it is prepping for setting up a sixth location in Colombia with others being located in Sao Paolo and Rio de Janeiro.

Further, AWS has plans to set up advanced data centers in Chile. Moreover, it has three availability zones in LATAM.

IBM owns three data centers in LATAM — one located in Hortolandia, Sao Paulo; another in Jundiai, Sao Paulo and the third in Queretaro, Mexico. Further, IBM Cloud Direct Link is now part of Ascenty’s connectivity portfolio. Notably, Ascenty is the largest data center infrastructure provider of LATAM.

Meanwhile, Microsoft Azure provides cloud facilities in LATAM through its data center in Brazil. Further, it has an availability zone in the country.

Nevertheless, Google Cloud’s hiring spree and expanding cloud business in the region are likely to aid its competitive edge in the market.

Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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