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Cloud Providers Eased COVID-19’s Impact on Brazil, Helping Enterprises Quickly Go Remote to Maintain Operations

Cloud Providers Eased COVID-19’s Impact on Brazil, Helping Enterprises Quickly Go Remote to Maintain Operations
ISG Provider Lens™ report says rapid growth in hybrid cloud use saved jobs and helped economy while tilting managed services industry toward consolidation

Providers of private/hybrid cloud services in Brazil responded quickly and creatively to the COVID-19 crisis, allowing enterprises to move computing resources off-premises to protect IT staff and maintain operations, according to a new report published by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

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“Moving enterprise applications off-premises during the pandemic was crucial to keeping businesses running, preserving jobs and reducing the social and economic impact of the global health crisis on Brazil.”

The 2021 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for Brazil finds the use of colocation, hosting and private clouds on public cloud infrastructure grew rapidly during the pandemic as enterprises enabled remote IT management.

“Brazilian companies raced to the cloud,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Moving enterprise applications off-premises during the pandemic was crucial to keeping businesses running, preserving jobs and reducing the social and economic impact of the global health crisis on Brazil.”

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Many Brazilian enterprises had kept their IT operations on site and faced a dilemma at the beginning of the crisis, forced to choose between protecting IT employees’ health and maintaining operations and full employment, the report says. Those that had already shifted resources to the cloud easily pivoted to remote work, and other companies soon followed suit.

The pandemic also caused a shift in the Brazilian managed services market from growing competition to increasing consolidation, according to the report. New managed services companies emerged over the past three years as public cloud vendors sought to attract more service provider partnerships, but the pandemic hit smaller players hard. Larger providers acquired many of them, and consolidation is expected to continue in 2021.

Most managed services providers reported revenue growth from increasing cloud adoption, while colocation providers continued to build new data centers in Brazil, Chile and Colombia, the report said.

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Application performance management has emerged as an important offering that differentiates the most successful managed service providers, ISG says. More enterprises are seeking providers that can correlate system performance to customer experience in addition to monitoring storage, availability, throughput and virtual machines.

The high number of cyberattacks, ransomware events and data breaches in Brazil in 2020 raised service providers’ awareness of security measures and compliance. The Lei Geral de Proteção de Dados (LGPD), the Brazilian equivalent of Europe’s GDPR, came into effect in 2020, leading many providers to offer their clients LGPD compliance assessments. While the law defines severe measures against companies that fail to protect individual privacy, none has been penalized yet, though some are under investigation.

The 2021 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for Brazil evaluates the capabilities of 35 providers across four quadrants: Managed Services for Large Accounts, Managed Services for Midmarket, Managed Hosting, and Colocation Services.

The report names Compasso UOL, Equinix and T-Systems as Leaders in three quadrants and Ativy, IBM, Lumen and TIVIT as Leaders in two quadrants. It names Ascenty, Capgemini, Claranet, Dedalus, Nextios, ODATA, Scala, TCS, Unisys and Wipro as Leaders in one quadrant each.

In addition, HostDime, Matrix and Stefanini are named as Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in one quadrant each.

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