The Cloud Goes Vertical in Mexico

Cloud adoption in Mexico is booming as industries like retail, manufacturing, and financial services rush to the cloud to leverage AI/ML, compute, and storage.

With 84% of Mexican companies using cloud services of some type, cloud adoption is booming in Mexico. Certain industry verticals have moved more quickly to the cloud than others, driven by specific use cases. According to a recent report by IBM, 57% of companies in Mexico are exploring the adoption of AI/ML, driving specific use cases in manufacturing, for example. Regulatory concerns are driving cloud investments in financial services, while secure, resilient data management and storage are driving public cloud requirements in the retail and healthcare industries.

Within these key industries, here are some examples of companies paving the way for cloud adoption in Mexico:

Manufacturing

According to an IBM Cloud case study, in San Luis Potosí, Tabicel, a concrete manufacturer, used cloud services to support the design and manufacturing of eco-friendly “green” construction materials. The company used the cloud to support business applications related to design, planning, and production, utilizing the scalability of the cloud and shedding the constraints of on-premises infrastructure. They reduced monthly infrastructure costs by half, application response times improved by 80 percent, and sales productivity increased by 30 percent.

Like our case study for Karma Automotive, Tabicel leveraged the cloud for their SAP applications, making their infrastructure more affordable while supercharging their design and manufacturing applications.

Financial Services

According to a recent Frost & Sullivan report regarding the Latin America IaaS market, the financial sector invests the most in IT. And because of recent regulatory changes with regard to cybersecurity policy and data sovereignty, many of the big banks in the region are investing in the large-scale CSPs. Banco Sabadell is a recent example, hosting their infrastructure with IBM Cloud in support of the first 100% mobile bank in Mexico.

Retail

Due to the huge amount of data generated by the retail industry, Forrester Research determined that roughly 77% of global purchase influencers in North American retail organizations made increasing their usage of cloud a moderate, high, or critical priority in 2020.

The pandemic has only accelerated this shift to the cloud. Mexican retailer Grupo Nazan sells footwear brands in Mexico through 100 physical stores, online channels, and call centers. During the pandemic, Grupo Nazan used Oracle Cloud to revamp its digital omnichannel customer experience. Customer service representatives were able to see real-time inventory, and Grupo Nazan was able to optimize logistics costs and conduct interest-based marketing to different customer segments.

Healthcare

According to a recent report from Vantage Market Research, the global healthcare cloud computing market is projected to be $70 billion US by 2028. North America made up almost 35% of global healthcare cloud computing spend in 2020.

At the Mexico Health Summit in 2021, Igor Fermin, Digital Transformation Advisor of Healthcare & Life Sciences in Latin America at Google, spoke about the impact of COVID-19 on healthcare digital transformation in the region. “Growing data volumes in healthcare, the most dynamic sector, are forcing many of the providers we work with to rethink their technology strategy, processes, resources and build new digital approaches,” Fermin said, citing the increased pressure the healthcare system in Mexico and Latin America is under due to the pandemic.

Like retail, the healthcare industry has expanding needs for data management and storage. Forrester Research found that in 2020, 74 percent of healthcare global purchase influencers in North America considered cloud usage a moderate, high, or critical priority.

Conclusion

Whether the driver is regulatory compliance, accelerating innovation in design and production, or just a need to translate massive tranches of data into business intelligence and actionable insights that positively impact the customer experience, cloud adoption is growing in Mexico. Manufacturers, financial services providers, retailers, and healthcare institutions in Mexico are paving the way for other industries to follow them into the cloud.

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