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Brazilian SMEs will spend $63bn in technology by 2020

Cloud computing is driving a massive increase in IT investments within the segment, says research

The small and medium enterprises (SMEs) segment in Brazil will see an increase in technology spend driven by adoption in cloud computing tools, according to a study.

IT spend within SMEs will jump from $48bn in 2016 to $63bn in 2020, says the 2016 Brazil Small & Medium Business: ICT & Cloud Services Tracker Overview carried out by AMI Partners on behalf of Intel Brazil.

According to the research, cloud-based tools will take an absolute priority in terms of overall IT investment for small companies (cited by 48 percent of respondents) and medium organisations (30 percent) in the Latin American country as firms seek more efficiency with a leaner IT set-up.

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But there is still a lot of room for development within the cloud market in Brazil, according to the study: in countries such as the US and Canada about 30 to 40 percent of SMEs still haven't exploited the model while the rate in Brazil hovers around the 70 percent mark.

In terms of effective business transformation driven by cloud computing, the study cites that only 3 percent of Brazilian SMEs have managed to achieve this, while 70 percent of small and medium firms in the US that have successfully done so.

Hurdles for cloud adoption cited by medium organizations polled include a focus on other projects such as server virtualization and data security while smaller companies are concentrated on obtaining faster Internet connections, which is linked to the need to invest in social media for marketing purposes.

According to the study, there is also a perception among SMEs that public cloud services are not secure enough, so a hybrid is more attractive to the segment. Popular applications include document management applications, as well as business intelligence and customer relationship management tools.

The study polled 251 IT decision makers in SMEs across the sectors of agribusiness, manufacturing, tourism, financial services, retail, education, healthcare, entertainment and tourism.

According to IDC, the Brazilian cloud services market should see yearly growth of 20 percent by 2020. Companies such as Amazon Web Services have been investing heavily in cloud provision services to Brazil-based businesses, particularly in the SME bracket.

Last week, Google has also joined the competition and announced that it will launch a new region for its cloud services provision platform in Brazil to cater for local demand.