IT vendors in Latin America should focus their commercial efforts on emerging industries such as retail, healthcare and agribusiness, Marcelo Ruiz, principal consultant of Frost & Sullivan's (F&S) ICT unit, said during a webcast.

The consultancy believes the Latin American banking and telecoms sectors will continue to be the top IT investors in the region, however, other industries are increasingly adopting IT as well. "An important segment is that of SMEs and many providers have launched special solutions for this market, such as ERPs, network security and data center solutions," the analyst said.

According to Ruiz, the overall Latin American IT market is expected to record annual growth rates of 12.5% from 2006 until 2011. Consultancy IDC believes IT investments in the region during 2007 are set to reach US$43bn.

The main driver of IT growth in the region is the increasing awareness of the advantages of modernizing IT infrastructure for efficiency and to boost return on investments. IT is also a necessity to meet international regulations such as Sarbanes-Oxley and Basel II, particularly for the financial sector.

Among the restraints in the market, Ruiz said that although there is economic and political stability in most Latin American markets, there are certain exceptions such as Venezuela, which sends out a bad message of the region as a whole and potentially is a limiting factor on investments.

"There are also cultural restraints. Latin American customers take a long time to make any important investment decisions and do a lot of benchmarking before purchasing any IT solution or service. That is why it is so important for providers to promote their solutions well," Ruiz added. Another obstacle is financial support, particularly for the SME segment. However, many global IT providers have already launched financial units to help SME clients purchase their IT solutions. Among the "hot IT topics" of the moment, F&S mentioned virtualization, SOA - although this technology is still at an early adoption stage - and BPO services. Security is also an important trend in the region and the consultancy recommends vendors to offer security services rather than products.

Source: bnamericas.com