IT spending in Brazil expected to grow by 2.9% in 2017
São Paulo hosts the most recent edition of the Gartner Symposium/ITxpo, an event in which Gartner, a world leader in research and impartial advice on technology, highlights its latest analysis of the Brazilian and global IT markets. Currently, one of the focuses of debates in the sector has been the digital transformation of business, which impacts not only companies, but the way people live.
Cassio Dreyfuss, VP of Research at Gartner
In Brazil, the analyzes need to take into account the period of turmoil generated by the economic crisis. “In times of increased threats, we also have more opportunities. IT managers need to understand that strategic planning, while difficult, becomes even more necessary,” said Cassio Dreyfuss, VP of Research at Gartner.
For the executive, strategic planning is one of the 3 key management tools. The other two are: architecture, which must provide the organization with the combination of resources that the company needs to achieve its business objectives; and governance, which maintains alignment and integration between projects and resources.
According to Dreyfuss, the recipe for digital transformation includes agility, flexibility, collaboration and two programs: one focused on cost optimization and the other that sets out the steps for digital transformation. “When we talk about cost optimization, we are not saying that the company needs to make cuts. Linear cost reduction in a company turns out to be a dumb decision from a business point of view, as each sector has a specific impact on expenses. This is an extremely strategic decision, to be based on data from each area”, added Dreyfuss.
IT spending in Brazil
IT spending in Brazil is expected to reach R$ 236.1 billion in 2017, an increase of 2.9% compared to 2016, according to the latest forecast by Gartner. Analysts say that, in the future, the strengthening of the real currency will make the IT dollar go further, helping organizations to update their technologies as the Brazilian economy improves.
“Significant exchange rate volatility and political developments have impacted the Brazilian market over the past two years. However, from an IT spending perspective and at a time of market austerity behavior, Brazil is starting to show signs of recovery. The country is in a transition phase towards technologies with an impact on business in the short and medium term and a digital transformation in the long term”, says Luis Anavitarte, Vice President of Research at Gartner.
Gartner's projections for 2017 in relation to 2016 indicate that the device segment (including PCs, tablets, cell phones and printers) in Brazil should reach a total of R$ 46 billion, an increase of 5.3%. Spending on Data Center systems will total R$ 6.8 billion, a decrease of 1.4% over 2016. Spending on software will reach R$ 14.6 billion, growing by 7.8%. IT services spending will reach R$ 55.4 billion in 2017, an increase of 6.3%, and communication services are expected to have steady growth, totaling R$ 113.3 billion in 2017. Software and IT services will be key to the development of the infrastructure of civilization.
The Infrastructure of Civilization
Val Sribar, Group Vice President at Gartner
Val Sribar, Group Vice President at Gartner, explained during the Symposium/ITxpo that digital transformation infrastructure will be the most important IT achievement of the next decade: “The infrastructure of civilization, the term we adopted at Gartner, will change to always the way people act socially, digitally and physically through connected sensors and digital intelligence.” According to the Vice President, CIOs will participate in the creation of a new digital platform based on intelligence, which will enable the creation of ecosystems, connected businesses and falling industries. It will change society itself and the way people live.
Civilization Infrastructure will be a new digital platform that will extend beyond the traditional IT infrastructure using new technologies that are atypical for the area. “A new digital platform will allow companies to participate in the evolving world of business, government and consumer ecosystems, because these ecosystems are the next digital evolution. It's how you compete at scale,” says Sribar.
The new digital platform consists of five domains: traditional IT systems, customer experience, Internet of Things (IoT), intelligence and ecosystem foundation. “These domains are interconnected and interdependent. Everyone has a role and everyone is needed”, explains the analyst.
Gartner explains the five domains of the new digital platform:
Traditional IT systems: It's the way CIOs run and scale operations, building on what has already been created, using traditional high-performance IT systems (such as Data Centers and networks) and modernizing to be part of the digital platform.
For example, leading companies are already halfway through the transition to the Cloud, starting with Sales and Marketing and now with half of their sales support capabilities already in the Cloud. This migration will continue until the end of the decade for areas such as HR, Purchasing and Financial Management. “Cloud, mobility, social and data capabilities need to be the focus of companies while investing in resiliency, business continuity and disaster recovery, vision and hybrid external approach,” says Sribar.
Customer Experience: it's how CIOs connect and engage in new ventures. The digital experience can be the only interaction between customers and the organization. This is how companies behave in the digital world. Pioneering companies are exploring how new virtual and augmented reality experiences will change customer engagement.
“In the world of chatbots and Virtual Personal Assistants (VPAs), mobile apps and even organizations' web presence will become much less relevant,” says Sribar. “The new competitive differentiator is understanding customer intent through advanced algorithms and artificial intelligence, creating new experiences that solve problems before customers even realize they exist.”
The Internet of Things (IoT): it is the way the company feels and acts in the physical world. Adding devices to the IoT domain is the easy part. Processes, workflows and data integration are far more complicated. In fact, two-thirds of companies have already had to restructure their existing IT systems to accommodate the IoT. The Internet of Things also changes the way CIOs should invest in Analytics because decision-making time will shift from days to minutes to instants. Executives should plan to shift their investments to real-time analytics, which by 2020 will be three times more widely used than traditional analytics, constituting 30% of the market.
Intelligence: it's how systems independently analyse, learn and decide. CIOs start with traditional data management, science and intelligence. Algorithms determine action. The new type of intelligence, driven by machine learning, is artificial intelligence. “We are building machines that learn from experience and produce results that their creators did not explicitly predict. They are systems that can experiment and adapt to the world through the data collected. Machine learning and artificial intelligence change at the speed of data, not the speed of releasing code, which now has information as a new foundation,” explains Sribar.
Ecosystem Base: it is the way the company interacts as an institution in the digital world and goes beyond the ability to decide. CIOs need to develop the ability to interact with customers, partners, adjacent industries and even competition in ways that ecosystems enable the transformation from traditional business with linear supply chains to business with networked digital ecosystems.
“Many industry models will transform with digital ecosystems, shifting from simple intermediary-driven relationships to distributed partnerships managed by a shared system of record like the blockchain. Building a strong ecosystem will help manage the transition. Ecosystems are the future of digital,” says the Vice President of Gartner.
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