IT providers seen strengthening channels in regions outside Santiago

- Wednesday, March 23, 2011

IT providers seen strengthening channels in regions outside Santiago

Major IT players in Chile are taking steps to strengthen channels in secondary cities such as Concepción, Puerto Montt, Valparaíso and Punta Arenas, international tech consultancy IDC's general manager for Chile, Natalia Vega, told BNamericas.

Capital city Santiago is not expected to lose its position atop the priority lists of IT firms, but significant macroeconomic growth and a jump in purchasing power is fueling a trickle-down effect in smaller metropolitan areas.

This week, Chile's central bank said overall economic growth topped out at 5.2% last year despite February's devastating magnitude-8.8 earthquake, while government projections for 2011 put growth above 6%.

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IT companies "are targeting the north and also central and southern regions," Vega said. "Economic growth is the reason behind this. Companies are touching down in those regions with distribution channels aimed at helping the adoption of technology and services."

A more concerted effort to meet client needs is also driving company actions, the analyst said.

"People used to have to travel to Santiago to purchase equipment or solutions. Today, an evolution in customer service has motivated companies to go where their clients are located," she said. "This trend has to do with business models and how they have adapted to this way of buying."

Aside from Chile, the shift toward consolidating presence in outer regions has also been noted particularly in Brazil.

SHIFT IN OPPORTUNITIES

IDC expects overall IT growth in Chile to top out at 5.5% this year, which is slightly below the overall Latin American growth projection of 6.3%, Vega said during a presentation.

Chile's overall IT market reached 1.87tn pesos (US$3.88bn) last year, with roughly 61% going to hardware, 28% going to software and 12% going to services.

Representing only 56% of overall IT sales in 2009, hardware jumped 29% in 2010, but Vega said a long-term change is in the air.

"As infrastructure implementations increase, they are complemented with software development. The IT ecosystem becomes more open to different types of professional IT services," she said. "During the next few years, we expect to see faster growth in software and professional IT services as a response."