Totvs expands cloud zones to 10 Brazilian datacenters

Totvs, Brazil’s largest software firm, has its sights firmly set on the clouds.

And not just the public cloud, through partnerships with AWS, Microsoft and Google, but its own cloud above all.

“Practically all of the new sales we make today are in the cloud. And the vast majority of these are in our cloud, Totvs Cloud,” CEO Dennis Herszkowicz told BNamericas.

Like other large ERP companies, Totvs has been investing in recent years in offering software as-a-service, rather than based on sales of perpetual, renewable licenses.

The model is a way of obtaining recurring sales, but also makes it easier to update customer systems and incorporate new features, thus facilitating upselling and further increasing revenues. 

Around 40% of Totvs' client base is in the cloud. In Q1, 86% of its total sales came from recurring revenue, with cloud revenues growing 30% year-over-year.

DATACENTERS

In Brazil, Totvs is spread through different availability zones, or datacenters.

Totvs Cloud is hosted in 10 Brazilian datacenters, Gustavo Bastos, VP of platforms and IT, told BNamericas.

Nine of these datacenters are in the metropolitan region of São Paulo and one in Fortaleza, Ceará state.

In São Paulo, the sites used for Totvs Cloud availability zones include those from Equinix and Ascenty. In Fortaleza, the company is in the Angonap datacenter, owned by TelCables Brasil (Angola Cables).

"It's not enough. We want to further decentralize this network to better serve customers in other parts of the country. We're looking at different regions, but it's not easy to find tier 3 sites with all the technical requirements we demand,” said Bastos.

Totvs was negotiating with two datacenter companies in the south of the country, both of which met the requirements for hosting its cloud. The floods in Porto Alegre, however, put the plans on hold.

The company is also targeting the north and center-west, such as Goiânia or Brasília, for new availability zones.

The majority of Totvs' customers are small and mid-sized companies, and many of these are set up from the country's three main datacenter clusters in São Paulo, Rio de Janeiro and Fortaleza. 

But it is not just datacenters that need to decentralize. 

The connectivity infrastructure, to connect customers to the sites and the sites to one another, also needs to expand across the country, which is why Totvs is engaging internet providers and B2B telecom companies. 

According to Bastos, recent talks included ones with a connectivity provider in the interior of São Paulo state.

Gustavo Bastos. Credit: Totvs

INVESTMENTS

The entire cloud structure also serves to support the firm's bets on generative AI. 

Internally, Totvs is using more than one large language model, such as Co-pilot and ChatGPT, for software coding and development, and product formatting for customers.

Externally, and taking advantage of the large datalakes it already has from customers in different verticals, Totvs is integrating advanced AI functionalities into logistics, manufacturing and retail software suites, among other areas.

Totvs plans to invest over 1bn reais (US$183mn) in R&D and innovation this year, said Herszkowicz, who also promises new M&As to strengthen the company by end-2024.