How Latin America contributes to the business of the 3 big tech players

Latin America offers key opportunities for big tech companies in the form of untapped connectivity, growing cloud computing adoption and a vast field in digitization and automation processes for enterprises and corporates.

BNamericas takes a look at the regional financial highlights of some of the largest players in the field. 

GOOGLE

Parent Alphabet reported a 11% year-over-year revenue growth to US$5.25bn for Google’s ‘Other Americas’ unit in the quarter ended December 31.

This geographic division excludes the US and broadly comprises Latin American and Caribbean markets, in addition to Canada.

In the full year, revenues for this group amounted to US$18.3bn, which correspond to roughly 6% of Google’s US$307bn total.

Beyond its traditional ads, search and video businesses, cloud and data transport operations have been a major investment focus for the company across the region.

This year, Google is expected to activate its second major Latin American submarine cable, Firmina, which adds to its Curie cable connecting Chile and the US. 

Firmina will connect Brazil, Uruguay and Argentina to the US. 

The cables add to three others Google operates, directly or in consortium, in Latin America: Monet (linking Brazil and the US), Tannat (connecting Argentina, Uruguay and Brazil) and Junior, connecting São Paulo and Rio de Janeiro states.

Google just announced it became a partner and major investor in Chile’s Humboldt cable, which is expected to be the first connecting South America to Australia.

Regarding datacenters, Google is building a site in Uruguay.

At present, the company has two global cloud regions in Latin America. 

It opened its Brazil Cloud Region, dubbed Southamerica-east1, in 2017, with three availability zones (datacenters) in São Paulo metropolitan area. 

The company’s other cloud region in Latin America is in Santiago, Chile (Southamerica-west1), which launched in 2021. 

Meanwhile, a Mexican cloud region is under development in Querétaro.

In 2022, Google announced US$1.2bn in investments in Latin America over a five-year period to expand its digital infrastructure and support startups and other organizations in the region.

This cash had been earmarked for cloud, submarine cable, digital wallet, hires and social programs, and could potentially increase. 

IBM

IBM performed better than expected in Latin America last year. 

Commenting on some of the company’s operations in an earnings call, CEO and chairman Arvind Krishna said, “Europe has kept remarkably resilient despite the conflict in Eastern Europe. Then when we come to North America, the economy here is resilient. Latin America, despite some early predictions, has actually done quite well.” But Krishna did not provide specifics.

IBM does not break down Latin America figures. 

Overall, the Americas delivered US$8.9bn in revenues in Q4, up by 5% year-over-year, and US$31.7bn in the full year, up by 2%.

The company posted total revenues of nearly US$62bn last year, up 2% as reported and 3% at constant currency, with software and services being chief growth drivers.

“Every client I speak with is asking about how to boost productivity with AI and how to manage their technology stack, much of which is deployed across a hybrid environment, public, private, and on-premises. These trends continue to fuel demand for both hybrid cloud and artificial intelligence,” Krishna said in the call.

Beyond corporates and individuals, IBM has put a focus on the public sector, as governments across Latin America digitize their systems and services provided to citizens.

Fabio Mucci, IBM’s regional security leader, told reporters recently that the company is working closely with authorities to help with AI frameworks and to provide overall services.

On the occasion, Mucci said that generative AI is a “path of no return” also for government applications. 

IBM also announced an alliance with mobile networks association GSMA, which includes Latin America.

MICROSOFT

Cloud and, more than ever, AI are at the main focuses of Microsoft in Latin America.

At present, Latin America is home to one main Microsoft Azure cloud region: Brazil South in São Paulo, and a sub-region, Brazil Southeast, in Rio de Janeiro. 

Two more regions, in Chile (Santiago Central) and Mexico (Mexico Central), are coming soon.

Each region features datacenters (Azure Availability Zones) deployed within a certain latency-defined perimeter. Each zone can comprise one or more datacenters. 

As BNamericas reported exclusively, Microsoft is advancing two new datacenters in Brazil.

Microsoft does not provide segment or market specifics for its Latin America business. 

Overall, the company's global revenue was US$62bn for the fiscal quarter ended December 31, up 18% as reported and 16% in constant currency. 

The Intelligent Cloud business, driven by Azure and AI, jumped 20%, up 19% in constant currency, to US$25.9bn in revenue.

“We’ve moved from talking about AI to applying AI at scale,” CEO and chairman Satya Nadella told investors in the earnings call. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”