IT projects to resume in Brazil in 2017

Despite current uncertainty, tech spending will increase and the local IT market is set to grow by 5.7 percent, says IDC
Written by Angelica Mari, Contributing Writer

Brazilian organizations will resume IT projects in areas such as digital transformations and security after a period of recession-driven stagnation, according to the yearly predictions for the country by analyst IDC.

The analyst's overall prediction is that the IT sector in Brazil will grow by about 5.7 percent in 2017 compared to last year's figures. Despite the overall climate of uncertainty that the country is still experiencing, CIOs are more confident as there is more predictability both from the economic and political standpoints.

"There is no more space to postpone transformation and innovation projects," says Denis Arcieri, director-general at IDC Brazil.

Digital transformation is an unavoidable route for companies seeking efficiency and competitiveness, the analyst says, adding that in Brazil about 10 percent of companies invest about 5 percent of their turnover in innovative technologies but this should become much more of a priority in 2017.

According to IDC, "going digital" has become obviously important to Brazilian organizations because it creates new business models, promotes the integration of physical and digital products and services, as well as an improved customer experience and greater operational and organizational efficiency.

Security investments are also predicted to see an increase from the first half of 2017 and spending in this area exceed $360 million by the end of the year, the main areas of interest for local organizations being Identity Access Management (IAM), cited as an intended spending area by 58 percent of the CIOs polled by IDC, followed by Security Information and Event Management (SIEM), cited by with 57 percent of decision makers.

However, one area of concern within security is related to Internet of Things (IoT), as 79 percent of Brazilian executives surveyed don't consider security practices for connected devices are well-defined in the local marketplace.

Still on the topic of IoT, the definition of public policies and incentives by the Brazilian government should boost initiatives in the field, according to Pietro Delai, manager at the consulting and research division of infrastructure and telecom at IDC Brazil.

"The IoT ecosystem in Brazil is expected to double in size by the end of the decade, surpassing $13 billion," says Delai, adding that the advance of IoT in Brazil will be tied to the increased use of data analytics and cloud computing.

The data analytics market in Brazil will grow 4.8 percent in 2017, generating $848 million in revenue in Brazil in 2017, according to IDC. In addition, cloud computing will finally hit the mainstream this year, with the public cloud market expected to grow 20 percent this year, generating $890 million in revenue.

"There are a lot of [cloud] success stories, companies are already aware of the benefits of the cloud and are overcoming their fears when they realize that providers are increasing security," Delai points out.

Other emerging technologies such as blockchain will start to become an important element of digital transformation at Brazilian organizations, but things will progress slowly.

"Some projects were developed in 2016 and others will come in 2017. It's a disruptive technology, but its adoption is gradual as regulatory and compliance challenges are immense in Brazil," Delai explains.

Cognitive technology has started to grab the attention of Brazilian IT buyers as a tool to support customer relationship and improve decision-making processes. IDC expects that within the next three years Brazil will see a five-fold increase in technology investments in this segment, to enhance customer service via resources such as automated responses and chatbots.

Adoption of Augmented Reality (AR) and Virtual Reality (VR) technology is also predicted to see an increase in Brazil in 2017 and that at least 100,000 products featuring the technology should be sold locally this year.

According to Reinaldo Sakis, Research and Consulting Manager for Consumer Devices at IDC Brazil, it is estimated that one in 10 of the largest consumer-focused companies in Brazil will use AR/VR as part of their marketing efforts this year, in applications ranging from construction of VR models in architecture to automotive maintenance with AR and virtual retail stores with AR and VR.

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