The Brazilian information technology and communications market is set to grow 7% reaching US$ 64,4 billion in 2021, with security and public cloud among key areas of focus, according to analyst IDC.
About 60% of Brazilian user organizations had been planning to increase their ICT spend at the start of 2020, the analyst house noted. However, the Covid-19 pandemic changed plans drastically, and intentions to boost investments plummeted to a record low in May and June. On the other hand, IDC noted that buyers are currently a lot more confident about ICT investments in Brazil, with 50% of companies planning to increase spend in 2021.
According to the analyst's predictions, other areas where companies will be increasing spend are artificial intelligence, modernization of enterprise software and customer experience. These investments are expected to increase productivity, and reduce costs.
In addition, buyers expect that new investments will help them strike a balance between digital and physical channels, as well as introducing new products and services or improvements, and technology that supports processes around improving customer acquisition and retention.
On specific trends, IDC noted that 5G will be moving towards large-scale adoption in the B2B space. In addition, connectivity will become strategically important to support developer experience; IDC also noted that 70% of companies will be delivering of operational models digitally, with an increase in automation, collaboration and content sharing.
In 2021, spending on security will exceed US$ 900 million in Brazil, up 12.5% over the previous year, with investments in managed security services reaching US$ 615 million. Visibility and protection of data will also be a key area of focus given te increase in large-scale cyberattacks and the new data protection requirements. However, the analyst noted that only 50% of companies stated they are in advanced stages of compliance with the data protection rules and two thirds say their biggest challenge is mapping and controlling information.
Cloud will also be advancing according to the predictions, with public cloud infrastructure and platform as-a-service spend in Brazil expected to reach US$ 3 billion, up 46.5% on 2020. The private cloud model will also grow at a steady pace, totaling US$ 614 million in 2021, and the biggest growth will be in private cloud as-a-service, predicted to grow 15.5% in 2021.
Still on cloud, almost 43% of companies intend to bring some of their management systems to the cloud in the next two years. For 31% of the Brazilian organizations, replacing a current application with a as-a- service option is the preferred approach for modernizing workloads. In that scenario, IDC forecasts a 12.6% increase in spending on enterprise software for areas such as finance, accounting, people and asset management, production control, logistics, supply chain reaching US$ 3.4 billion, with software-as-a-service representing 14%.
AI adoption is also set to grow: according to IDC, about a quarter of large-size organizations in Brazil are using AI and machine learning. AI spending in Brazil will reach US$ 464 million in 2021, driven mainly by IT and business consulting services. Chatbots and digital assistants in corporate applications will continue to grow, with adoption set to reach nearly 30%.
Edge computing is also set to grow in Brazil at a yearly rate of 16% between 2019 and 2023, the analyst noted, with migration, integration and automated management of applications and data in cloud implementations becoming increasingly common.
When it comes to hardware, sales of tablets and notebooks in Brazil are expected to reach US$ 4.7 billion in 2021, up 21% compared to the previous year, which represents 7.3% of all IT investments in the country. The Brazilian smart devices market, with the exception of smart TVs, is also expected to grow by around 30%, according to the analyst firm.