Computer Hardware
In Brazil, there is a positive outlook in this sector. Some of the factors that support the growth of the IT industry in Brazil are a stable economy, strong local currency and availability of loans, though recent financial crisis has taken its toll but to a lesser extent. In 2008, Brazil invested US$ 24 billion in information technology, which counts for 2% of Brazil’s GDP. Of this amount, US$ 12.5 billion was invested in computer hardware, US$ 8.5 billion in IT Services and US$ 3 billion in computer software.
These figures reflect a very positive scenario for Brazil. Among all BRIC countries (Brazil, Russia, India, and China), Brazil positions itself in second place only behind China in terms of investments in information technology, says IDC. It is also estimated that investments in IT in Brazil will be larger than the country’s GDP growth (estimated by federal government at a 1.5% for 2009).
Best Prospects in Computer Hardware
Prospects for 2009 are positive, despite the economic crisis that is currently affecting the global economy. The Brazilian Electric-Electronic Association believes that the industry will continue on its growth path and will reach a positive result of 7% increase compared to the estimated country’s GDP growth for 2009.
The main reasons for growth in Brazil’s IT hardware segment are economic stability, lower dollar values and tax exemption on computer sales through the “Lei do Bem”. Though this law targeted PCs and notebooks, with increased computer sales comes increased demand for printers.
According to industry forecasts, 2009 should continue be the “Year of the Notebook”, as mobile computer sales will continue to grow. According to estimates by retail experts, within two months of the launch of the lower-priced notebooks, prices could drop even lower because of increased sales volume for computer components.
Sales of corporate network servers in Brazil should increase this year. Falling prices of the machines, the renewal of the established base and the computerization of small and medium-sized companies are among the factors contributing to the expansion.
Brazil will continue to import computer hardware and peripherals as local production cannot keep pace with demand, while PC manufacturers may not be able to meet demand because of some processor shortages.
Computer Software
Software sales in Latin America are expected to increase by 11.5% this year. Given the forecast for steady growth of the Brazilian economy over the next several years, Brazilian IT spending should increase at a healthy pace. The demand for telecommunications software is expected to grow as a result of the convergence of data, voice, and conventional and mobile telecommunications. The most significant topic in this sector is the increase of data communications in cellular telecommunications, which is expected to continue growing for the next few years.
The computer software segment is affected by the illegal market. According to BSA – Business Software Alliance - there was a one-percent reduction in the software piracy index in Brazil, reaching 59% (US$ 1.617billion). From the 108 countries that were part of this study, the usage of pirate software was reduced in 64 and increased in 11 countries. The result is considered positive for Brazil as the country was able to reduce this figure for two consecutive years, reducing 5% in total.
A recent study shows that a 10% reduction in pirated software in Brazil could generate a stronger IT market reaching 11,500 new jobs, US$ 2.9 billion in revenues for the local industry and an additional US$ 389 million in taxes.
Best Prospects in Computer Software
There is a new trend for acquisitions in Brazil to merge IT, infrastructure, network and telecommunications. The unanimous opinion shared by analysts is that the trend shows a movement towards consolidation and convergence of technologies. Within the software segment, 36.2% of the market represents purchases of enterprise applications such as CRM, ERP or SCM solutions while systems infrastructure solutions, such as platforms for administering and running software assets, contribute 35.2%.
E-commerce is gradually becoming part of the daily routine of Brazilians as companies overcome the initial lack of trust that usually accompanies new business concepts. The sector’s growth prospects for 2009 are 40%, with a sales volume of US$ 5.5 billion. With an eye on such forecasts, E-commerce companies in Brazil have made investments to finance their expansion while adopting measures to lessen capital costs.
For medium-sized enterprises in Brazil, the two largest drivers of this year's growth in Brazil's software market are the increasing use of enterprise applications, and the systems infrastructure software segment. Data security and data backup or recovery will be investment priorities in the upcoming months. IT security is also a priority for companies in Brazil, concerned with protecting themselves against hackers and viruses. With increasing network and Internet-based connectivity, combined with frequent electronic attacks from viruses and worms, Brazilian firms are realizing their vulnerability and have begun systematically implementing IT security measures.
For Additional Market Research and news on the Computer Hardware & Software Sector in Brazil:
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