Brazilian IT market sees major leap in 2018

The sector has been resilient despite the crisis and is predicted to grow further, according to a new report.

The Brazilian IT market has seen a positive performance in 2018 and steady growth in areas such as artificial intelligence, cloud and higher-end devices is predicted for the next few years, according to research.

According to data released by the Brazilian Association of Software Companies (ABES) and IDC, the IT sector in Brazil has seen growth despite the economic instability of the last few years, up 9.8 percent in relation to 2017 and generating $46.6 billion - the figures relate to the internal market only.

The numbers represent more than double the forecast for the year (4.1 percent) and growth from 2017 to 2018 (4.5 percent) and point to recovery following the market downturn in 2016, according to the president at ABES, Rodolfo Fücher.

"This scenario shows that technology has become an important component for companies' competitiveness and efficiency in times of crisis," he added.

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Of the total amount generated in 2018, $23.9 billion (51.3 percent) refers to investments in hardware, while $ 12.2 billion (26.2 percent) relates to services and $ 10.5 billion (22.5 percent) to software.

Software developed in Brazil accounted for 30 percent of all the investment in systems, according to the study. There are nearly 20,000 companies providing software and services in Brazil, of which 95.5 percent are small and medium enterprises.

The numbers follow the release of a preview of the ABES study in April, where the association and IDC found that growth rates in the IT sector in Brazil are superior to the world average of 6.7 percent.

Looking ahead

For the years to come,  the study forecast annual growth of 46.2 percent in the use of artificial intelligence (AI) in Brazil, reaching $52 billion by 2021.

In addition, AI and automation interfaces will replace one-third of application screen interfaces in the country by 2024, according to the ABES report. About 15 percent of large and medium-sized companies in the country have AI among their top IT priorities and the number is expected to double over the next four years.

The public cloud market will also maintain a steady growth rate in Brazil, reaching $ 2.3 billion in 2019 and maintaining yearly growth of about 35.5 percent and reaching $ 5.8 billion in 2022.

Sale of devices will account for 38 percent of all IT investment in the country, generating about $ 24.5 billion this year. According to the study, higher-value devices will be a major contributor to the growth of the Brazilian IT sector in 2019.