Cloud Computing:  Optimizing Corporate IT Spending in a Time of Crisis

Amy Larsen DeCarlo – Principal Analyst, Security and Data Center Services

Volatile economic conditions drive Latin American enterprises to tap the cloud to get the most from their technology investments.


Geopolitical events and financial instability have placed intense pressure on enterprises worldwide to reassess their investments. Organizations are questioning the efficacy of their information technology spending, with a particular focus on cloud.

In Latin America, businesses are contending with the combination of high inflation and interest rates, exchange rate issues, supply chain challenges, geopolitical risk, and skills gaps. In 2022, inflation was off the charts in key countries in the region – e.g., with Argentina spiking to an astonishing 94.8%. Other Latin American countries dealt with less severe but still extraordinary rates including Brazil (9.2%), Chile (11.7%), Colombia (10.1%), and Mexico (8%).

Concerns are high that the confluence of negative factors will result in a slowdown in revenue growth. The United Nations regional commission projects that growth across all subregions within Latin America will decline in 2023.The commission estimates South America will see 0.6% expansion this year compared to 3.8% in 2022. Central America and Mexico are expected to grow 2% versus last year’s 3.5%. The commission predicts the Caribbean (minus Guyana) will record 3.5% growth, down from 5.8% in 2022.

With these factors under consideration, Latin American organizations are reassessing their IT strategies and carefully scrutinizing budgets. Not only are they looking to cut costs, but enterprises also want to improve overall efficiency and productivity. To this end, GlobalData found that 55% of organizations in Brazil have increased their cloud spend significantly in 2022 by 6% or more over the previous year.

The cloud, and making sure costs and capacity is managed effectively, are crucial elements of enterprise investment. Long identified as a key to helping organizations eliminate capital expenditures and reduce operating costs, cloud computing is front and center in keeping corporate IT spending in line during a time of significant economic challenges.

Unfortunately, many organizations built out their cloud estates in an ad hoc fashion with individual lines of business and discrete projects driving a hodge-podge of cloud deployments across multiple cloud environments. The result was often an inefficient and costly spend.

More enterprises in the region are aiming to discover how business value and cloud financial management intersect so they can derive the maximum benefit through all phases of a deployment from migration through production.

One of the biggest misconceptions about cloud benefits is that its primary payoff comes from lower cost of ownership of cloud versus traditional on-premises environments. While lower IT infrastructure costs are certainly part of the cloud value equation, TCO improvement represents only a fraction of the value to the business. Many of the most significant returns come from the increased flexibility a cloud environment provides. Organizations get faster access to the latest technology updates, helping drive better productivity, risk mitigation, faster time to market, and sustainability.

Effective cloud financial management actually starts in advance of an implementation with pre-migration planning. Addressing the question of how to manage cost and usage starts before workloads are migrated to the cloud. Customers use cloud financial management toolkits including a pricing calculator and migration evaluator to determine the best deployment option. Having really good governance is an essential element.

There are different challenges at different phases. During the early discover phase, IT decision makers need to ask the fundamental questions of how and where the cloud can help their organization. What is the value each provider brings to the table? What support does the cloud provider offer through migration, post deployment and ongoing evolutionary processes? During the evaluation stage, IT personnel should look at multiple options and ask what differentiates one cloud provider from another. How do different pricing plans work? And how can the team create a cost-aware deployment to deliver business value?

After the organization selects and starts to use a cloud solution, it needs to find ways to accelerate value and maintain cost efficiencies. The final step in this process is expand and renew. In this phase, IT identifies new opportunities and assesses its strategies in managing its vendors. Beyond managing its cloud service providers, this work across teams enhances collaboration across IT, business, and finance so they can align on purpose and expansion targets.

At all phases and stages, IT needs the tools to demonstrate why cloud is a most effective investment. And IT also needs to understand the equation must include both the cost of the investment but also the value delivered to the business.

A cloud value framework is needed that the entire organization can continuously apply to their own specific situation to identify where and how a payoff is being realized from the cloud investment. This framework would consider a range of benefits from business agility to accelerated time to market. It would also look at factors like staff productivity, operational resilience, sustainability, and total cost savings.

For cloud financial management to be really successful an element that needs to be in place is strong cooperation between and among IT, procurement, supply chain, operations, and c-level management.

While cloud environments often entirely replace the data center, they cannot be run in the siloed fashion of a traditional facility. Instead, the cloud environment needs to be administered with cost and benefit always firmly defined. Enterprises also need to understand this is journey which is not linear in nature but a continuous cycle. How can the organization reduce unit costs? Successful cloud financial ownership is really about partnership across the organization. How should costs be allocated? Does the organization have clear visibility into costs? And how are they optimizing operations with respect to costs?

Cloud financial management best practices require clear ownership of individual elements and leadership sponsorship. The team needs to measure key performance indicators in order to quantify cloud business value and to have a consolidated planning across the entire IT estate. Organizations should also have distributed model of governance, and require user accountability to achieve continuous improvement.

What is key to a successful cloud implementation, is always keeping in mind that the value to the business needs to be part of every phase of the deployment. Particularly in times of great economic turbulence, the cloud is the technology answer to supporting efficient and effective business operations. Solid cloud financial management is essential to maximize returns and support an ongoing collaborative across teams.

Measuring Mobile User Activity During the Coronation and Beyond

R. Pritchard

Summary Bullets:

• Movers Index gives quarterly UK movement data collected by O2 Motion and by polling users to provide insight into behavior of the British public and businesses.

• More than 114,000 people visited central London (England) to be part of the Coronation parade, delivering a boost to business, matched by similar behavior nationwide.

Virgin Media O2 Business’s new Movers Index combines aggregated and anonymized UK movement data collected from its O2 Motion proposition (Virgin Media O2 Business O2 Motion may have been too much of a tongue twister), combined with polling of businesses and consumers ‘to provide quarterly trends and insights into the behavior’ of the British public and UK businesses.

Continue reading “Measuring Mobile User Activity During the Coronation and Beyond”

Generative AI Watch: ‘RingSense’ by RingCentral is Well Positioned in a World That Both Embraces and Fears AI

G. Willsky

Summary Bullets:

• RingSense marks the latest addition to RingCentral’s AI portfolio and arrives after a noticeable hiatus.

• RingSense closes a competitive gap with rivals who have recently responded to the emergence of ChatGPT with their own generative AI offers.

RingCentral recently launched an open beta of RingSense, a generative AI platform that leverages voice and natural language processing (NLP) to analyze business conversation data. The first iteration is RingSense for Sales, which dissects interactions between sales reps and customers or prospects across calls, emails, and video meetings. Users can assess rep and team performance, discover customer wants and needs, and more. Along with RingSense for Sales, RingCentral plans to release four additional, related offers: RingSense for Revenue Leaders, RingSense for Sales Enablement, RingSense for Customer Success, and RingSense for Marketing. Continue reading “Generative AI Watch: ‘RingSense’ by RingCentral is Well Positioned in a World That Both Embraces and Fears AI”

IIoT Service Providers Seek Revenue Growth Through Vertical Solutions and Service Enhancements

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• While IoT services and connections are growing, GlobalData forecasts that connectivity revenue growth (five-year CAGR of 6%) is lower than other aspects of IoT growth (five-year CAGR of 10%). This is partly due to lower ARPU as IoT connectivity (e.g., for LP-WANs) becomes less expensive.

• To expand services and add revenue, operators are partnering with vertical industry experts, adding technology enhancements to improve operations and customer ease of use, and offering edge services and private networks that complement IoT solutions.

Over the last six months, IoT announcements from AT&T, Verizon, Deutsche Telekom, Orange, Telefónica, Vodafone, Tata Communications, and Telstra included the following:

Continue reading “IIoT Service Providers Seek Revenue Growth Through Vertical Solutions and Service Enhancements”

Generative AI Watch: Will Generative AI Drive Additional Demand for MEC Services (and 5G)?

J. Marcus

Summary Bullets:

• There are many potential use cases in the enterprise for generative AI, but many will be enabled by existing cloud solutions.

• Some use cases requiring real-time responses may emerge, generating modest demand for MEC and/or 5G services.

Expectations of demand for 5G and multi-access edge computing (MEC) services from the enterprise segment are established – in part – on enabling artificial intelligence (AI) to be used in real-time applications. AI requires considerable computing power, usually achieved in the cloud where its demanding requirements can be scaled, but where such resources are too distant (due to network latency) to be relied upon for use cases where seconds or milliseconds in application response time can determine success or failure. There are other reasons why MEC makes sense in this scenario, including both the security benefits and cost savings achieved by not sending massive amounts of data to and from the cloud. With the recent hype around generative AI and the potential impact on various professions, industries, and organizations, it is worth considering whether its uptake will mean even more demand for MEC and/or 5G.

Continue reading “Generative AI Watch: Will Generative AI Drive Additional Demand for MEC Services (and 5G)?”

Ericsson’s Cradlepoint Plays a Unique Role in the Enterprise Mobility Ecosystem

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• When Ericsson acquired Cradlepoint in 2020, the latter was focused on enterprise wireless WAN equipment, which was considered an emerging business for the network infrastructure vendor.

• Now Cradlepoint is at the heart of Ericsson’s enterprise strategy, bringing diverse channel partners and new products with which to flesh out offerings to meet a growing demand for wireless connectivity.

When Ericsson acquired Cradlepoint in 2020 for approximately $1 billion, the latter vendor specialized in wireless WAN solutions. It offered 4G/5G mobile and fixed site cellular routers and adapters, vehicle and IoT routers, and network management software available via a cloud-based software-as-a-service platform, featuring zero-touch onboarding. At the time, it had approximately one million subscriptions among US and global enterprises, SMBs, and public sector businesses. Cradlepoint was initially part of the Ericsson Business Area Technologies & New Businesses business unit and sold its products indirectly to businesses through a diverse channel of 1,500 system integrators, CSPs, and resellers, augmenting Ericsson’s traditional channel (and primary customer base) that had long been dominated by CSPs.

Continue reading “Ericsson’s Cradlepoint Plays a Unique Role in the Enterprise Mobility Ecosystem”

Dual 5G Networks – Still Far from Ideal but Way Better than SWN to Drive 5G Development in Malaysia

A. Amir

Summary Bullets:

• The details are still unclear, but the Malaysian government’s announcement on dual 5G networks is a positive move that can accelerate 5G developments in the country.

• Telcos should start collaborating and get more involved in the second 5G network for greater control of the infrastructure.

The Malaysian Communications and Digital Ministry recently announced that 5G rollout in the country will move to the second phase, in which Malaysia will have a dual network model upon reaching a population coverage of 80% of the first network. Having dual wholesale networks is still far from ideal compared to separate deployments by the telcos. However, it is a very positive move from the single wholesale network (SWN – for more on SWN, please see “Malaysia 5G Through SPV: One Step Forward and Two Steps Back,” March 8, 2021) as it will provide wider options for telcos/service providers and enable them to differentiate. It can also drive 5G development and accelerate innovations in creating new applications and use cases. All major local telcos (e.g., CelcomDigi, Maxis, and Telekom Malaysia) have already voiced their support for the dual networks while the largest player, CelcomDigi, has announced it will withdraw its equity participation with Digital Nasional Berhad (DNB – i.e., the current SWN provider).

Continue reading “Dual 5G Networks – Still Far from Ideal but Way Better than SWN to Drive 5G Development in Malaysia”

KubeCon EU: Modernizing IT Operations Through GenAI

C. Dunlap
Research Director

Summary Bullets:
• Intelligent automation solutions will serve as an initial app platform that provides enterprises with access to generative AI (GenAI)
• Security firms will leverage GenAI as a means for enhancing cloud security posture management and attack path analysis

Last month’s KubeCon EU was a big hit in terms of record-breaking attendance and new blood seeking guidance on easing tasks associated across the Kubernetes stack. Many were also looking for answers on GenAI’s new role in app modernization and operational provisioning.
Continue reading “KubeCon EU: Modernizing IT Operations Through GenAI”

Telecom Wholesalers will Require an Underlying Strategy for AI

R. Muru

Summary Bullets:

• The telecom wholesale segment is behind the AI implementation curve, and companies need to do more by embracing innovation – i.e., exploiting opportunities for generative AI.

• Success for telecom wholesalers will entail developing an underlying AI strategy across the portfolio and company in a connected manner.

Telecom Wholesale Trends in 2023
GlobalData’s discussions over the last year with global leading telecom wholesale providers highlights a commonality in strategy among telecom providers selling wholesale connectivity, both in terms of strategic vision and in the products and services they offer. Where companies differ is influenced by the nature of the core networks that support products and services, global geographical reach, and strength of product/service brand (e.g., antifraud solutions, mobile roaming), and lastly partnerships.

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While Enterprise IoT Platforms Market Consolidates, Vertical Specialists and Market Leaders Advance Offerings

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• Several high-profile vendors of enterprise IoT platforms disbanded their offerings in 2022/23 as products commoditized, margins shrank, and/or some platforms never generated sufficient revenue.

• However, the overall IoT market is still healthy. On the platform side, existing vendors are enhancing feature sets and vertical players are becoming leaders.

Since 2018, the size and scope of the IoT platforms market has grown. These platforms facilitate deployment and management of IoT projects and provide tools to develop and run IoT applications. However, high-profile dropouts that have disbanded their platforms have plagued the market recently. GlobalData has the position that this does not indicate softness in the IoT market overall. However, it does highlight a trend in which vendors blend IoT with adjacent solutions or use a third-party platform go-to-market approach rather than maintain their own expensive platforms, which may not yield sustainable margins.

Continue reading “While Enterprise IoT Platforms Market Consolidates, Vertical Specialists and Market Leaders Advance Offerings”