Emerging technologies seen going mainstream this year

Wednesday, January 19, 2011

Technologies such as cloud computing and social networks that hit the Latin American market in 2010 are expected to go mainstream in 2011, the VP for research and consulting at IDC, Ricardo Villate, told an online webcast.

The percentage of Latin American enterprises looking to adopt cloud computing increased from 3.5% of all companies at the start of 2010 to 14% at year's end, and Villate said the upward trajectory will continue unabated into the future.

Latin America's public cloud services market will surpass US$200mn this year and post a CAGR of 60% for the next five years. Major players such as Microsoft (Nasdaq: MSFT), HP (NYSE: HPQ), IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL) will roll out new cloud offerings this year, and regional telecommunications players are also expected to refine their offers for SMEs, Villate said.

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Meanwhile, Latin America's social platform market will double in size this year from its current value of US$50mn. Social networking tools will become increasingly commonplace, particularly in firms that devote heavy resources to marketing activities.

Elsewhere, Latin America will experience a second wave of virtualization and data center service adoption, according to the analyst, who noted that vendors in the region are reconfiguring their offering to accommodate demand in these areas.

Additional trends shaping the regional market include application modernization, mobile devices, LTE development, government ICT projects and continued M&A activity.

IDC expects Latin America's overall IT expenditures to rise 6.3% this year, driven by a 9.1% rise in IT services. Software and hardware growth are seen growing at a slower clip, bringing in 8.2% and 4.7% increases, respectively.

Vertical markets putting their money where their mouth is include the financial, telecommunications and government sectors, Villate said. The latter sector is expected to have a particularly large impact in the IT markets of Argentina, Brazil, Mexico, Colombia and Chile.

The analyst added that Latin America's overall economic scenario will also buoy the IT industry. IDC sees the region's middle class and tier-2 cities - which are classified as metropolitan areas with 1.5mn-2mn residents - as playing a more relevant role in technology purchases this year.