Azure Gains an Edge in Mexico’s Expanding Cloud System

Rhea-AI Summary

Microsoft Azure is experiencing significant growth in the Mexican cloud market, driven by system migrations and demand for remote access. According to the 2024 ISG Provider Lens™ report, Azure's growth surpasses other cloud services due to ongoing development and increased competitiveness. The demand for cost reduction and productivity enhancement, accelerated by the pandemic, has led Mexican firms to adopt cloud solutions like Microsoft 365 and SAP on Azure. These tools enhance efficiency, collaboration, and compliance. The report highlights the proactive response of Microsoft's partner ecosystem to generative AI and names top service providers in various sectors. Accenture and DXC Technology lead in all evaluated categories, with several other firms recognized for their capabilities and future potential.

Positive

• Microsoft Azure is leading in the Mexican cloud market, indicating strong market positioning.
• Azure's growth rate is superior to other cloud services in Mexico.
• Ongoing development of new resources and tools on Azure.
• Increased competitiveness in a highly contested market.
• Microsoft 365 helps reduce operational and infrastructural costs.
• SAP on Azure offers cost reduction and efficiency improvements for companies.
• High-performance providers offer migration services for SAP S/4HANA, ensuring compatibility.
• RISE with SAP proposal spurs new implementations and migrations to Azure.
• Proactive response to generative AI from Microsoft's partner ecosystem.

Negative

• Skills shortages in dealing with immediate technology demands.
• Dependency on external providers for migration and strategic recommendations.
• Potential increased competition from other cloud service providers.

Insights

Market Research Analyst

The expansion of Microsoft's Azure platform in the Mexican cloud market signals a strategic move to capitalize on the region's growing demand for cloud services. This trend reflects a broader regional shift towards digital transformation, accelerated by the pandemic. With increased investment in resources and training by cloud service providers, the market is becoming more competitive. For retail investors, this suggests potential for growth in both the cloud sector and Microsoft's stock, as the company secures a stronger foothold in an emerging market.

The adoption of solutions like Microsoft 365 and SAP on Azure highlights the efficiency and cost-savings benefits driving this growth. The report notes that enterprises are increasingly looking to these solutions for their flexibility, scalability and ability to foster innovation. This aligns with global trends where cloud adoption is seen as a key driver of business agility and digital transformation.

However, investors should be aware of potential challenges. The mention of a skills shortage in the market could slow down adoption rates and affect service quality. Additionally, the competition from other established cloud service providers means that Microsoft's growth is not without risks.

Financial Analyst

From a financial perspective, Microsoft's growing presence in Mexico's cloud market could significantly bolster its revenue streams. The report underscores the superior growth of Azure compared to other cloud services in the region, suggesting that Microsoft's strategic investments are paying off. This could positively impact Microsoft's overall financial performance, given the importance of cloud services to its business model.

Moreover, the rising popularity of Microsoft 365 and SAP on Azure indicates strong demand for subscription-based services, which offer recurring revenue streams and higher margins compared to traditional software sales. This shift towards cloud-based solutions could enhance Microsoft's profitability and financial stability in the long term.

Investors should also consider the broader economic context in Mexico. The country's push towards digital transformation and cloud adoption presents a significant growth opportunity. However, macroeconomic factors such as currency fluctuations and local economic conditions could impact Microsoft's performance in this market.

Microsoft is experiencing a period of growth and innovation in the burgeoning Mexican cloud market, ISG Provider Lens™ report says

MEXICO CITY--(BUSINESS WIRE)-- Buoyed by the steady migration of systems to online and remote access environments, Microsoft’s Azure is rapidly extending its reach in the Mexico cloud market, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for Mexico finds the Azure platform is recording growth superior to that of other cloud computing services in the country. The main reasons cited are the constant development of new resources and tools for the platform as well as Microsoft's increased competitiveness in a hotly contested market, the ISG report says.

“The Azure managed services market in Mexico is witnessing rapid growth,” said Bill Huber, partner, Digital Platforms and Solutions, for ISG. “An increasing number of cloud service providers are investing in resources and training and seeking the Azure Expert MSP seal as proof of their ability to comply with the highest standards of managed services.”

Sparked by a stepped-up need to reduce costs while responding to a growing customer demand originally brought on by the pandemic, Mexican companies are looking for solutions that increase productivity and improve interoperability, the ISG report says.

Microsoft 365, a suite of cloud productivity applications, helps companies reduce operational and infrastructural costs and increase efficiency and collaboration among teams, while offering security and compliance resources, the ISG report says. It includes Microsoft Teams, a collaboration tool that enables real-time work while providing artificial intelligence and data analysis to aid companies in making more informed decisions, the report says.

With the growth of the software-as-a-service market in Mexico, SAP on Azure, a solution that allows companies to execute SAP applications in the Microsoft cloud, has become an attractive option for reducing costs while increasing efficiency and collaboration, the ISG report says. High-performance providers offer migration services for the SAP S/4HANA platform, ensuring compatibility and visibility in the new architecture and providing strategic recommendations to optimize performance in the cloud, the report says.

The Mexican market is increasingly adopting the RISE with SAP proposal, which allows companies to acquire cloud infrastructure, applications, integration services and support for SAP implementations under a single contract. RISE is spurring a growing number of new implementations and migrations to the Azure cloud, ISG says.

“Enterprises in Mexico are turning to cloud computing services to aid their digital transformation and make it easier to adopt innovative technologies,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The flexibility and scalability of cloud services have allowed these companies to innovate and scale more efficiently.”

The report also examines how the Microsoft partner ecosystem in Mexico has proactively responded to the introduction of generative AI.

For more insights into the Microsoft cloud ecosystem challenges facing enterprises in Mexico, including dealing with skills shortages and responding to immediate technology demands, and ISG’s advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for Mexico evaluates the capabilities of 28 providers across five quadrants: Managed Services for Azure, Microsoft 365 Services, SAP on Azure Services, Power Platform Services and Generative AI Services for the Microsoft Clouds.

The report names Accenture and DXC Technology as Leaders in all five quadrants, while Softtek and SoftwareONE are named as Leaders in three quadrants each. Ingram Micro, Logicalis and Telefónica Tech are named as Leaders in two quadrants each, while AlfaPeople, bSide, IBM and NEORIS are named as Leaders in one quadrant each.

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

In the area of customer experience, Bechtle is named the global ISG CX Star Performer for 2024 among Microsoft cloud ecosystem providers. Bechtle earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for Mexico is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523822398/en/

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What is driving Azure's growth in the Mexican cloud market?

Azure's growth in Mexico is driven by steady system migrations to online environments and the constant development of new resources and tools.

How does Microsoft 365 benefit Mexican companies?

Microsoft 365 helps Mexican companies reduce operational costs, increase efficiency, and improve collaboration and compliance.

What is the SAP on Azure solution?

SAP on Azure allows companies to execute SAP applications in the Microsoft cloud, reducing costs and increasing efficiency and collaboration.

Who are the leading providers in the 2024 ISG Provider Lens™ report for Mexico?

Accenture and DXC Technology are named Leaders in all evaluated categories, while other firms like Softtek, SoftwareONE, and IBM are also recognized.

What challenges do companies face in the Mexican cloud market?

Companies face challenges such as skills shortages and responding to immediate technology demands.

How has the pandemic influenced cloud adoption in Mexico?

The pandemic has accelerated the need for cost reduction and productivity enhancement, driving Mexican companies to adopt cloud solutions.