Local firms increase representation among IT sector leaders in Brazil

Brazilian enterprise IT providers can be placed side-by-side with large international vendors; cloud drives sector growth.

Brazilian companies are becoming increasingly relevant among the main vendors active in the enterprise IT sector, according to a new study.

Local tech firms represented nearly half (42%) of the leadership in the technology market in 2020 in Brazil, while 58% of the market is dominated by international companies, noted the study by TGT Consult, the consulting arm of research firm Information Services Group (ISG).

The number of Brazilian technology businesses occupying leading positions in ISG Provider Lens reports has grown 75%, compared to 2019, the consulting firm noted. The survey also reveals that there is a growing number of Brazilian companies appearing in the reports for the first time. In the last year, that number has more than doubled.

"Our data shows that there is an evolution of local companies in the technology market. They are already competing in some segments with major international players and have been gaining [increasing market share] in services and products relating to digital transformation", said Maurício Ohtani, a researcher at ISG.

Moreover, ISG noted that findings from its studies from the past 3 years suggest that Brazilian IT companies can now be placed side-by-side with large multinational players.

"Resilience and talent are the main characteristics that I can pick to justify this growth [of Brazilian IT providers]. Most of them make use of data, varied resources and partnership-focused relationships", explains Ohtani.

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The study is based on an analysis of all the providers taking in the ISG Provider Lens studies in Brazil, in which a total of 282 companies were evaluated during 2020. Of these, 107 were placed as leaders across the 98 quadrants.

According to the research, the segments where fastest growth could be seen among Brazilian technology companies in 2020 were all related to cloud, as the Covid-19 pandemic accelerated adoption of of-premise services by user organizations, with more vendors looking to cater for that demand.

When it comes to public cloud in particular, the ISG study observed significant growth in Brazilian companies in the "product challenger" quadrant for managed services and transformation in large accounts. The presence of local companies has also been increasing in the leaders quadrant for transformation services.

In the private cloud, national companies active in managed hosting and colocation services also seen an increase, according to ISG. Local vendors have also been growing in customer experience, mobility support and agile development.

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

According to the IDC study, IT spending in Brazil in a pre-Covid scenario 19 had been enjoying growth of 6%.For 2021, IDC growth predictions before the pandemic surpassed 9% and have been readjusted to 6.8%.