The News: Webex Calling has announced the opening of a data center, a new point of presence (PoP) for their global network in Brazil. This is the company’s first PoP in South America and is intended to improve the security, quality, and reliability of Webex Calling. Read more from the Webex blog of the new PoP.
Webex Calling Announces First Data Center in South America, Expanding Global Presence
Analyst Take: Webex Calling’s announcement of its first data center in South America caught my eye this week. Under normal circumstances, the opening of a new data center wouldn’t be all that notable. In this case, however, Webex Calling’s move on this front speaks to several market trends of interest to Enterprise Communications obsessives.
A Data Center South America — Why Now?
Webex was founded in 1995 and was at one point estimated to have captured roughly 70% of the “web conferencing” market. The brand has been a part of the leading group of enterprise communications vendors since the very beginning of the industry and continues that role today, more than 25 years later. This is Webex’s first data center in South America. Why now?
The major existing markets for enterprise communications are nearing a point of saturation, yet Latin America has an estimated 66.5 million knowledge workers and an estimated 117.6 million frontline workers well suited for the adoption of enterprise communications products in market today. This combined 184.1 million prospective users today have an estimated 8.23 million online meeting licenses and 5.6 million enterprise calling licenses. The growth potential of the region, with its friendly time zones, increasingly technically talented workforce, and strengthening economies, is very attractive for communications vendors looking for green pastures.
The Brazilian arm of Spain-based Telefonica, a major Webex partner, announced last week that it had delivered a 1.126 billion Real ($215 million) profit in Q4 of 2022. Telefonica has proven to be a formidable partner in the region, and Webex appears to be leaning into that partnership and the region to capitalize on the opportunity.
South America has, in the past, had a reputation for bad network conditions and limited demand for advanced communications services. Network conditions there are improving as vendors like Cisco, Microsoft, and Amazon build out infrastructure in the region to act as a backbone of sorts for communications and digital business. The Digital Maturity, as tracked by Wainhouse Research, of the region has been flat for the last 2 years after a general upward trend driven specifically by adaptive attitudes toward the digitalization of work, the agility of businesses to adapt to new conditions, and IT integration in legal and governmental frameworks.
South America represents a clear and present opportunity for enterprise communications vendors looking for growth. Cisco and their partner Telefonica appear to be making investments in the region to take full advantage. It remains to be seen if the rest of the field will follow.
Disclosure: Wainhouse Research, part of The Futurum Group family of companies, is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Wainhouse Research as a whole.
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The original version of this article was first published on Wainhouse Research.
Image Credit: Webex
Author Information
Sean is a trusted advisor to and assists industry vendors and enterprises with workplace communications and collaboration strategies, market entry and product assessment, product portfolio analysis, and sales enablement services.
Sean holds a Bachelor of Science in International Business from University of Colorado, Boulder.
