Brazilian IT market on the road to recovery in 2021

Cloud, analytics and security will be the main areas of investment, research says
Written by Angelica Mari, Contributing Writer

Technology companies in Brazil are moving towards recovery in 2021, with cloud computing, analytics and security being the three key areas of investment for buyers, according to a new study by analyst firm IDC.

According to the IDC WW COVID-19 - Impact on IT Spending Survey report carried out in June 2020 and updated in September, a more optimist outlook has been noticed of late. In June, 48% of the Brazilian companies polled said they immersed in the crisis, while the number has dropped to 14% in September.

When it comes to IT budgets, 42% of the Brazilian organizations surveyed said their spending for the coming year will be greater than what was forecast before Covid-19, while 22% will stick to their forecast and 36% said budgets should decrease in the coming year.

According to the IDC study, IT spending in Brazil in a pre-Covid scenario 19 had been enjoying growth of 6%. Currently, growth has dropped to about 2.8%. The analyst firm argued that despite the drop, the fact there is still growth reiterates that companies will continue to invest in IT.

For 2021, IDC growth predictions before the pandemic surpassed 9% and have been readjusted to 6.8%. In Infrastructure as a Service (IaaS), for example, pre-pandemic projections pointed to a 38.8% growth in spending and the forecast is now close to 26.9%.

Companies will still invest in managed and support services in Brazil, even if at a slow pace, the analyst firm said. The same is not likely to happen in the server and storage segment, which, according to IDC, had been shrinking even before the pandemic.

On the other hand, sectors such as cloud have been bullish in Brazil. Separate research carried out by the Regional Center for Studies on the Development of the Information Society (Cetic.br), the research arm of the Brazilian Network Information Centre (NIC.br), show an evolution in usage when comparing the last edition of the research in 2017 and the numbers from 2019.

According to the research, cloud-based storage grew from 25% to 38%. Enterprise software in the cloud has increased from 20% to 27% in two years, as well as the use of cloud processing capacity, which went from 16% to 23% over the same period.

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