Brazilian Software Industry Sees Improvement As Digitization Accelerates

Software vendors saw an improvement in business in 2020 as local organizations accelerate digital strategies to meet the demands posed by the Covid-19 pandemic, according to new research.

According to numbers from analyst form IDC, software providers had a revenue increase of 30% last year, the equivalent to $8.15 billion considering the dollar hike against the Brazilian real. The analysis includes sales of software in areas such as IT infrastructure management, artificial intelligence, and customer relationship platforms.

Cloud was one of the highlights of 2020, the analyst said, as companies turn to off-premises solutions as an accelerator for their modernization and digital transformation plans. According to IDC, public cloud revenue in Brazil reached $3,02 billion, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS) offerings.

The segment of collaborative tools is another highlight of the software industry in Brazil in 2020, according to the IDC report, alongside enterprise resource planning platforms, a segment that saw a 25% uptick last year. Going forward, the analyst noted that companies will continue to seek software platforms to enhance areas such as engagement - both internally and in terms of customer relations - resulting in a steady demand for customer relationship management tools.

For 2021, the analyst firm predicts that growth in the software industry will not be as bullish as last year, when organizations sought to fill technology gaps and meet digital demand. However, IDC predicts "significant" demand for the sector, with double-digit growth.

The Brazilian information technology and communications market is set to grow 7% reaching US$ 64,4 billion in 2021, with security and public cloud among key areas of focus, according to research published by IDC in February. Other areas where companies will be increasing spend are artificial intelligence, modernization of enterprise software and customer experience. These investments are expected to increase productivity, and reduce costs.

According to a separate report by analyst firm Gartner, Latin America will be among the last global regions to return to pre-Covid levels of IT spending. Global spending on information technology will reach $4.1 trillion in 2021, the analyst said, an increase of 8.4% on 2020. On a regional basis, Latin America is expected to recover in 2024, while Greater China has already exceeded IT spending levels in 2019. North America and Western Europe are expected to recover by the end of 2021.