Brazil’s IT services market targeted to reach nearly $9 billion

NSAM STAFF REPORT Brazil´s IT services market is expected to continue to provide opportunities in 2009, despite slower growth, with projected total spending of around US$8.7bn, according to …

NSAM STAFF REPORT
Brazil´s IT services market is expected to continue to provide opportunities in 2009, despite slower growth, with projected total spending of around US$8.7bn, according to a report released recently by Companies and Markets, a worldwide research firm.

The economic situation is likely to have an impact on projects in some key verticals that have been driving IT spending. In early 2009 there were reports of IT managers in various sectors reviewing spending, and of cuts, particularly in less tangible services such as consulting.

In the near term, budgets have often already been commissioned, and so the effects would be more likely to be felt in the second half of 2009 and in 2010. The government was proceeding to roll out a number of complex, multi-year projects, despite the bad economy. Much will depend on the timing of global economic recovery, and the likelihood of IT budgets being cut will increase the longer the slowdown lasts. Brazil has an ambitious plan to become one of the world´s top IT outsourcing destinations by 2010, but will have to overcome a number of challenges to achieve this.

Broadband Penetration
According to estimates, the number of Brazilian internet users reached nearly 39mn in 2008, representing 20.3% of the population. The percentage of broadband subscribers in the general population, however, was only 5.2%. The World Economic Forum ranked Brazil 53rd in the world in its most recent survey of “degree of preparation to participate in and benefit from information and communications technology”, ranking Brazil fourth in the region behind Chile, Barbados and Mexico. The government recently said that 37mn elementary school children in Brazil should have access to broadband by 2010.

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