INDUSTRY
IDC: SMB Market in Latin America Showing Robust Growth in IT Investments
With over half a million SMB companies in Latin America (companies with 10 to 499 employees), IDC expects this segment to invest more than $10 billion dollars in IT during 2006. This is a considerable proportion of the total IT spending in the region and the leading IT vendors cannot miss the opportunity to expand their presence in such a promising market. For 2009, IDC expects that SMB IT budgets will have grown to almost $14 billion dollars. 
Based on a recent survey of over 1,900 businesses in Latin America, more than half of the companies between 10 and 499 employees interviewed by IDC said they would increase their IT budget in 2006 compared to 2005. This outlook is more optimistic than the one IDC received when it last surveyed Latin American SMBs in September 2005. "Still recovering from the economic crisis that affected this country a few years ago, Argentina is the country where SMBs are going to increase their IT spending the most, followed by Brazilian SMBs. So IDC expects an excellent year for the SMBs in the Mercosur region," said Emerson Gibin, senior market analyst with IDC Latin America. SMBs in Latin America are buying more integrated solutions and fewer standalone products and services each year. "The SMBs are naturally lagging behind larger businesses that need much more complex solutions and have larger IT budgets to invest towards consulting and IT services in integrated IT solutions," said Gibin. More than half of the IT outlays by SMBs in Latin America continue to be purchased as standalone products and services. But this represents an important decrease compared to IDC's survey last year. One can also see much more IT being bought by SMBs with the advice of a third-party consulting firm and also a considerable proportion of the SMBs buying integrated business process solutions, consisting of hardware and/or software as well as one or more IT or business consulting services. When IDC asked the Latin American SMBs about their most important solutions spending for their businesses in 2006, the top mentioned solution is security, followed by ERP. Compared to large businesses in Latin America, the SMBs are late in implementing the most advanced IT solutions such as CRM, business intelligence (BI), supply chain, and business continuity. However, one can see a fast evolution is underway and IDC expects that the growth for SMBs will be higher than the growth for large businesses, which means that IT vendors should be prepared to provide specific and customized solutions to SMBs. This is already a fact for the most important IT vendors that have already realized that this unsaturated SMB market can be a goldmine for the next few years.
Based on a recent survey of over 1,900 businesses in Latin America, more than half of the companies between 10 and 499 employees interviewed by IDC said they would increase their IT budget in 2006 compared to 2005. This outlook is more optimistic than the one IDC received when it last surveyed Latin American SMBs in September 2005. "Still recovering from the economic crisis that affected this country a few years ago, Argentina is the country where SMBs are going to increase their IT spending the most, followed by Brazilian SMBs. So IDC expects an excellent year for the SMBs in the Mercosur region," said Emerson Gibin, senior market analyst with IDC Latin America. SMBs in Latin America are buying more integrated solutions and fewer standalone products and services each year. "The SMBs are naturally lagging behind larger businesses that need much more complex solutions and have larger IT budgets to invest towards consulting and IT services in integrated IT solutions," said Gibin. More than half of the IT outlays by SMBs in Latin America continue to be purchased as standalone products and services. But this represents an important decrease compared to IDC's survey last year. One can also see much more IT being bought by SMBs with the advice of a third-party consulting firm and also a considerable proportion of the SMBs buying integrated business process solutions, consisting of hardware and/or software as well as one or more IT or business consulting services. When IDC asked the Latin American SMBs about their most important solutions spending for their businesses in 2006, the top mentioned solution is security, followed by ERP. Compared to large businesses in Latin America, the SMBs are late in implementing the most advanced IT solutions such as CRM, business intelligence (BI), supply chain, and business continuity. However, one can see a fast evolution is underway and IDC expects that the growth for SMBs will be higher than the growth for large businesses, which means that IT vendors should be prepared to provide specific and customized solutions to SMBs. This is already a fact for the most important IT vendors that have already realized that this unsaturated SMB market can be a goldmine for the next few years.