Brazilian Firms Favor Hybrid Cloud for Efficiency and Cost Savings

Brazilian companies are turning to hybrid cloud solutions to enhance efficiency and reduce costs, driven by the growing interest in generative AI. The demand for hybrid cloud infrastructure is on the rise as businesses modify their IT infrastructure to balance efficiency, speed, and security. Companies are repatriating functions from public clouds to cloud-connected hosting or colocation facilities to manage workloads more efficiently.

Brazilian companies are increasingly adopting hybrid cloud solutions to enhance efficiency and reduce costs, driven by the growing interest in generative AI. According to a recent report by Information Services Group (ISG), demand for hybrid cloud services and consulting is rising as enterprises modify their infrastructure to balance efficiency, speed, and security [1].

The 2025 ISG Provider Lens® Private/Hybrid Cloud — Data Center Services report for Brazil finds that companies are exploring alternatives to public clouds, including private clouds and colocation services, with many opting for hybrid approaches. The report highlights that the transition is accelerated by the significant computing and connectivity requirements of generative AI, as well as the need to control resource consumption by AI users [1].

Optimizing infrastructure spending is a high priority for Brazilian companies, with many repatriating functions from public clouds to cloud-connected hosting or colocation facilities. This approach allows businesses to migrate workloads to the most efficient platform, thereby reducing costs [1].

The report also notes that while companies are using public cloud infrastructure for generative AI proofs of concept, they find it too expensive for full-scale implementations. As a result, they are considering ways to run generative AI on hybrid architectures to minimize cost of ownership while preserving privacy and confidentiality. Providers of hybrid cloud design are assisting a growing number of enterprises in making this transition [1].

To facilitate the quick transfer of data among distributed workloads, companies in Brazil are seeking secure, low-latency connections across hybrid environments. Providers are responding to this demand with security tools, software-defined networking (SDN), and infrastructure as code. Colocation companies offer private direct connections that allow clients to transfer data among colocation facilities, hosting services, and public clouds without going over the Internet [1].

The colocation market in Brazil and neighboring countries is growing, driven by the rising need for digital services fueled partly by AI. Brazilian colocation providers are building facilities across Latin America to host graphics processing units (GPUs) for AI and large language models (LLMs). Within Brazil, the vast distances between major cities are forcing colocation firms to develop low-latency SDN connections [1].

According to Pedro L. Bicudo Maschio, lead author of the report, enterprises want generative AI to both increase revenue and reduce costs. Latin America’s cloud infrastructure is growing and maturing to turn these goals into reality [1].

The report also examines other cloud trends affecting Brazilian organizations, including rising interest in alternatives to VMware for managed hosting and increasing demand among small and midsize enterprises for tested use cases of cloud-based LLMs [1].

References:
[1] https://ir.isg-one.com/news-market-information/press-releases/news-details/2025/Brazilian-Firms-Seek-Hybrid-Clouds-for-AI-Cost-Savings/default.aspx