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IT investments in Brazil will outperform if reforms passed - Gartner

By BNamericas Thursday, April 25, 2019

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IT spending on hardware, software and services in Brazil is projected to reach US$37bn this year and US$47.7bn by 2023, but could soar well above that if certain structural reforms are approved in the country.

This is the view of Gartner’s senior research director, Henrique Cecci, in an indirect reference to the hotly-anticipated pension reform and tax overhaul bill expected to be voted on in congress.

The figures were presented during Gartner’s IT Infrastructure, Operations and Cloud Strategies Conference, which took place in São Paulo this week.

“Hardware continues to grow, but very slowly. But when we look at services [cloud, collocation, hosting], the segment has been expanding significantly. Cloud computing spending is expected to double in the coming years, and this is a more conservative take. If things go well in Brazil, if reforms are made, we should see even more investments from foreign companies,” Cecci said in a press conference.

Broken down by segments, Brazilian spending on hardware is seen  growing slightly to US$3.48bn by 2023, from US$3.34bn this year, while investments in software and IT services are seen jumping to US$12bn and US$32.3bn, from US$8.22bn and US$25.5bn, respectively.

There is a still plenty of room for growth, according to Cecci.

In 2018, cloud investments in Brazil reached US$2.8bn, he said, which is just a small fraction of the total spent on IT. This amount is also very low compared to other countries’ investments in cloud and in workload virtualization, the executive added.

Brazil's US$37bn projected spending for this year compares to a worldwide IT spending forecast of US$3.8tn, according to a recent Gartner outlook.

With that, Brazil would represent just 1% of global IT investments, in constant currency terms.

BEHAVIORAL COMPETENCIES vs DIGITAL TRANSFORMATION

During the event, the consultancy presented the results of a survey carried out with various major organizations around the world.

According to Gartner, 75% of IT leaders are not prepared in terms of the skills, behaviors or cultural presence needed over the next two to three years.

As workload becomes less concentrated and more pervasive, so does the workplace. And leaders are embracing edge computing, artificial intelligence (AI) and the ever-changing cloud marketplace.

“The new I&O worker profile will embrace versatile skills and experiences rather than reward a narrow focus on one technical specialty,” said Katherine Lord, research vice president at Gartner.

“Leading companies are changing the way that they reward and develop employees to move away from rigid siloed career ladders toward more dynamic career diamonds," she said,

According to Gartner analyst and research VP Bob Gill, people have looked at IT in a factory model for too long, now for over 40 years.

“We're now moving to a world where what's happening in many cases is that the business unit gone from internal services to external services. IT is less insulated and more pervasive,” he said.

Gartner analysts argue that companies position specific workloads based on business, regulatory and geopolitical impacts. As organizations’ customers and suppliers grow to span the globe, I&O leaders must deliver on the idea that “infrastructure is everywhere,” they say.

To analyst Dennis Smith, one of the key things in this process is automation.

“Even if you're not moving fast enough to cloud, you need to double or triple your bet on automation,” he said.

Smith estimates that companies spend an average 60-70% of their time on repetitive manual tasks.

 

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