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Main problem with local hosting solutions is pricing, I think.

I can get a DO VPS machine with a reasonable performance for US$ 5/mo, while most known Brazilian providers would set me back about US$ 20/mo for a similar machine. If latency is not a big issue for you, it just doesn't make sense to host it here, unfortunately.

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And DO is still more than 2 times as expensive as OVH is. Which is why I host in the EU, getting more security for less money.

TL;DR: OVH provides more “fuck murica”[1] on the euro than DO.

— [1]: This is not meant against the people of the US, but its government and secret agencies.

With AWS having brazillian hosting and established firms already there operating at a high price, it does seem like the skillset is in place for someone in brazil to do something entrepreneurial.

What exactly do you mean?

Are you talking about undercutting Amazon's price? The prices are that hight because of taxes, nobody can undercut them on Brazil.

No I am talking about undercutting the other local Brazillian businesses.

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