Oracle Cloud: ‘Latin America is one of our main growth centers’

Oracle is fast expanding its data infrastructure across Latin America, leveraging a global multi-cloud partnership with Microsoft, but also in the wake of rising corporate cloud computing needs.

AI compute demands are now scaling the expansion up to new levels. 

Such a scenario, together with customers' needs to have content and data locally stored and Latin America's clean and available energy matrix, make the region a destination for more datacenter investments.

In this interview with BNamericas, Greg Pavlik, global senior vice president of AI and data management services at Oracle Cloud, talks about the region's growing importance for the company’s data investments and the AI factor.

BNamericas: Oracle has now seven cloud regions in Latin America, having been the first public cloud to set up a cloud region in Colombia. The company is also working on a second one in Chile and a third in Brazil. What are the main drivers for those expansions and how does the region fit in with the broader AI boom shaking up the industry?

Pavlik: I’d say, not to be surprising, that the drivers are mostly the economic opportunity we are seeing in the region. Latin America is one of our main growth centers. It is a very healthy part of Oracle’s businesses overall. 

We are aiming to have the super majority of our revenue being cloud-based, in services and delivery, across Latin America within the next couple of years.

The driver for growth and the driver for regional expansion is really customer demand and the overall growth in the market.

BNamericas: How about AI?

Pavlik: As far as how Latin America plays into some of the strategic factors like AI, I think there is… North, Central and South America, the Americas in general, seem to be the most aggressive regions for uptake. Not to say the most important globally. 

Certainly people everywhere are interested in AI and the generative AI landscape. There is no question about that. But it does seem to be a willingness [in the region] to lean in and move more aggressively with the technology towards production, as opposed to just experimentation.

It seems to be something that’s more pronounced in the Americas. I see this as the common theme with many customer conversations in the region, of being more aggressive than in other parts of the world.

BNamericas: Regarding the Oracle Cloud Infrastructure (OCI), we’ve been seeing Oracle going hand-in-hand with Microsoft for cloud regions, as part of both companies’ global alliance. Will the new OCI cloud regions due to come online in the next quarters, including in Latin America, necessarily be in partnership with Microsoft? Or can Oracle go on its own?

Pavlik: It will be both. With Microsoft, we are looking at regions to pair them up when there is geographic proximity. Customers really do value that high speed and interconnectivity when the regions are tied together. We will look at those as kind of opportunistic models for expanding our joint business.

What’s nice about that, as you know, is that most customers have long ago accepted the fact that there wasn’t going to be one cloud to rule it all. That they would have multi-cloud strategies. 

Both Oracle and Microsoft have been the two companies most upfront in terms of realizing and really embracing that reality. 

BNamericas: So, market demand aside, you’ll invest with them in places where they already have some sort of Azure infrastructure deployed?

Pavlik: That’s correct. 

We see lots of customers for their core transaction systems using Oracle databases. In many cases, they want to use those in the cloud. And we have a unique investment we’ve made in terms of the internal networking architecture and security that it’s really necessary to do high-reliability cluster databases.

We have this unique combination of the way we’ve engineered the cloud from the hardware up, together obviously with the leading database software. 

We really need to bring OCI to Azure, so a big part of that partnership is making that, let's say, converged cloud software offering available where the customer needs it.

BNamericas: Is Oracle also embracing a self-building datacenter strategy or does it prefer partnering with a datacenter provider for its new sites?

Pavlik: Historically, we've been working with colos [colocation datacenter providers] and partners. Then sometimes, obviously, we are doing the customer datacenter. 

But as things evolve and the scale of our business changes, we are always reevaluating our approach to datacenter build-out.

I will say also that with some of the new Nvidia technology, and the liquid cooling and so forth, the shape and format of datacenters, at least as it relates to some of the AI-centered workloads and the giant supercomputers, is likely to change as well.

BNamericas: Latin America is often cited as a strong candidate to attract the new boom in datacenters, fueled by energy-hungry AI workloads, due to its clean energy matrix, as well as a relatively good power availability, not to mention land. What’s your view?

Pavlik: The biggest factor is proximity to customers, people preferring to leverage their compute and manage their data within the geography their businesses are located in. 

However, it is certainly important that there be adequate power, especially for genAI workloads. 

In the US, some years ago, there was a power crunch with some pullback in power builds in Virgina, which is a major area for datacenters. That caused us really to take a hard look at this problem from a global perspective and make sure that we were planning our expansion with a lot more attention and detail on power availability in the long run.

Not much land. Datacenter space is much less a challenge than power. 

But the fact that the power availability dynamics may be a bit easier in Latin America is a plus. 

It doesn’t change the fact that one is going to Latin America or that it will make the region more attractive. But it will somewhat make it more accessible and timely in terms of our ability to expand. 

BNamericas: What are your perspectives on the industry overall in 2024? How many new cloud regions can we expect, for example?

Pavlik: I can’t really comment on anything that we haven’t announced in terms of new regions. But I’d say, even just backward-looking to our last quarter, that cloud is growing significantly, and I expect it to continue to grow strongly.

That growth will not just be net new computers for expanding workloads, but we’ll be doing more and more specialized deployments. GPU availability will be increasing, more AI services and capabilities are coming out over the next quarter or so. One I’m most excited about is our OCI Generative AI Agent Service. 

This is one thing that makes Oracle unique, that makes OCI unique, which is bundling infrastructure, platform services plus an industry-leading suite of applications.