ICT investment trends in Brazil. Enterprise ICT spending patterns through to the end of 2015 May 2014

ICT investment trends in Brazil Enterprise ICT spending patterns through to the end of 2015 May 2014

1 Trends in ICT budgets 1.1 Summary This report presents the findings from a survey of Brazilian enterprises regarding their Information & Communications Technology (ICT) investment trends. The survey investigates how Brazilian enterprises currently allocate their ICT budgets across the core areas of enterprise ICT expenditure: hardware, software, IT services, communications, and consulting. The report illustrates the core technologies enterprises are investing in, including business intelligence, mobility, green IT & virtualization, and cloud computing. The survey also highlights the approach adopted by enterprises in Brazil to purchase technology. Through Kable s survey, the report aims to provide better insight to ICT vendors and service providers when pitching their solutions to enterprises in Brazil. The survey was conducted in Q4 2013 via an online methodology, with respondents all having ICT decision maker responsibility (typically CIOs and IT Managers). Kable plans to repeat the survey in the second half of 2014, in order to monitor ICT budget changes on an on-going basis. 1.2 Reason to buy This report will help readers to understand how the Brazilian enterprise ICT landscape is set to change in 2014. Gain a view as to how ICT Brazilian Reals are being allocated in your target audience. The report covers a detailed breakdown of the opportunities within each of the core areas of ICT spend (hardware, software, IT services, telecommunications, and consulting.) The report will help users to gain a view of the current strategic objectives of Brazilian enterprises. The report will provide a detailed breakdown of the opportunities within selected technology categories (business intelligence, mobility, green IT & virtualization, and cloud computing). Understand the factors that are influencing Brazilian enterprises decision to select an ICT provider. Gain a view as to the business and IT objectives Brazilian enterprises are looking to achieve through their ICT investment strategies. ICT investment trends in Brazil P a g e 1 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

1.3 Survey demographics Figure 1: Brazilian enterprise ICT survey industry breakdown Brazilian enterprise ICT survey industry breakdown Financial markets Utilities Education Retail Manufacturing Insurance Government Healthcare Energy Media Retail banking Pharmaceuticals respondents Table 1: Brazilian enterprise ICT survey industry breakdown Industry Count Percentage of respondents Financial markets Utilities Education Retail Manufacturing Insurance Government Healthcare Energy Media Retail banking Pharmaceuticals Total ICT investment trends in Brazil P a g e 2 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

Figure 2: Brazilian enterprise ICT survey breakdown by size band (number of employees) Brazilian enterprise ICT survey breakdown by size band (number of employees) Over 10000 5000-9999 2000-4999 1000-1999 500-999 100-499 50-99 respondents Table 2: Brazilian enterprise ICT survey breakdown by size band (number of employees) Employee size band Count Percentage of respondents Over 10,000 5,000-9,999 2,000-4,999 1,000-1,999 500-999 100-499 50-99 Total ICT investment trends in Brazil P a g e 3 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

1.4 ICT budget changes Figure 3: Recent and expected ICT budget changes among Brazilian enterprises Table 3: Recent and expected ICT budget changes among Brazilian enterprises Trend 2012-13 (Count) 2012-13 (%) 2013-14 expectation (Count) 2013-14 expectation (%) Decrease more than 6% Decrease slightly (1%- 5%) Flat (0%) Increase slightly (1-5%) Increase significantly (6%+) Total Despite the uncertain economic conditions... (Summary of the situation in the enterprise ICT market and discussion around the degree to which IT budgets are decreasing/increasing/staying flat.) ICT investment trends in Brazil P a g e 4 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

1.5 ICT budget allocation by core technology area Figure 4: Brazilian enterprises (external) ICT budget allocation, 2013 and 2014 Table 4: Brazilian enterprises (external) ICT budget allocation, 2013 and 2014 Category Average budget in 2013 (%) Average budget in 2014 (%) Software Hardware Services Communications Consulting Other Total Kable s survey suggests that Brazilian enterprises are allocating a major portion of their IT budgets on...... (A brief description of the way in which enterprises are allocating their IT budgets.). on how this breaks down by provider type). ICT investment trends in Brazil P a g e 5 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

1.5.1 Hardware budget breakdown Figure 5: Brazilian enterprises average hardware budget allocation Table 5: Brazilian enterprises average hardware budget allocation IT function Average budget (%) Clients Network and communications equipment Mainframes Security Servers Processors Storage Peripherals Total Kable s recent survey finds that almost one third of the hardware spend is on... (A brief description on where the investments are being made and what the implications are for hardware vendors.) ICT investment trends in Brazil P a g e 6 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

2 ICT investment priorities and vendor mindshare 2.1 Core technology investment priorities Figure 6: Current and future investment priorities of Brazilian enterprises across core technologies Table 6: Current and future investment priorities of Brazilian enterprises across core technologies Technology category Have now (Count) Have now (%) Considering investment in next 2 years (count) Considering investment in next 2 years (%) Green IT & virtualization Mobility Cloud computing Business intelligence According to the survey, Green IT & virtualization have the highest penetration rate,...(brief description of which technologies enterprises are currently investing in, as well as those that they are set to make the greatest investments in, in the next couple of years) ICT investment trends in Brazil P a g e 7 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

2.1.1 Mobility Figure 7: Mobility Brazilian enterprises current and future investment priorities Table 7: Mobility Brazilian enterprises current and future investment priorities Mobility Have now (count) Have now (%) Considering investment in next 2 years (count) Considering investment in next 2 years (%) Device management Employee/supplier facing application development Tablet computing Customer facing mobile applications The demand for mobility is growing in Brazilian; such solutions enable enterprises to manage their operations more effectively by providing... (Briefly describe in which sub categories enterprises are planning on making investments). ICT investment trends in Brazil P a g e 8 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

3 ICT procurement trends 3.1 Purchasing channels Figure 8: Brazilian enterprises' preferred approach to buying technologies Table 8: Brazilian enterprises' preferred approach to buying technologies Technology Direct from supplier deployed on-site Through a local reseller deployed on-site Through a national reseller deployed on-site Direct from supplier as a hosted service Through a local reseller as a hosted service Through a national reseller as a hosted service Enterprise applications 100% Business intelligence 100% Total ICT investment trends in Brazil P a g e 9 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

IT systems management 100% Security 100% Communications & collaboration 100% Mobility 100% Content management 100% Green IT & virtualization 100% According to Kable s survey, it is evident that the majority of Brazilian enterprises prefer buying technologies...... (Brief description of the enterprises approach to buying IT products and preferred deployment modes across various technology categories) 3.2 Business objectives influencing IT investment strategy Figure 9: Business objectives which influence Brazilian enterprises' IT investment strategy ICT investment trends in Brazil P a g e 10 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

Table 9: Business objectives which influence Brazilian enterprises' IT investment strategy Business objectives Increase customer satisfaction Increase revenues Raise efficiency Achieve or maintain regulatory compliance Improve supplier relationships Cut costs Average rating A majority of Brazilian enterprises rate... as their most important business objective. 3.3 IT objectives influencing IT investment strategy Brazilian enterprises make IT investments to better demonstrate the value of IT to the business Figure 10: IT objectives which influence Brazilian enterprises' IT investment strategy ICT investment trends in Brazil P a g e 11 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

Table 10: IT objectives which influence Brazilian enterprises' IT investment strategy IT objectives % of responses(1) % of responses(2) % of responses(3) % of responses(4) Average rating Better demonstrate the value of IT to the business Use IT to support revenue growth Deliver new functionality to business users Meet internal service level agreements Align IT with overall business goals A majority of Brazilian enterprises rate... as their most important IT objective. ICT investment trends in Brazil P a g e 12 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

4 Report Methodology Kable s Customer Insight Survey reports are primarily based on the information (related to ICT budgets, priorities and procurement plans) collected through an annual survey performed in the fourth quarter of every year. The primary research involves a major program of interviewing CIOs and IT executives regarding their IT investment and priorities. The secondary research process involves covering publicly available sources, company annual reports, and press releases. The content in the report is written by analyzing the survey findings and substantiating those findings through secondary research. ICT investment trends in Brazil P a g e 13 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

5 Further reading ICT investment trends in the India, May 2014 ICT investment trends in China, April 2014 ICT investment trends in Canada, April 2014 ICT investment trends in the Japan, May 2014 ICT investment trends in Brazil P a g e 14 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

TABLE OF CONTENTS 1 Trends in ICT budgets... 5 1.1 Introduction... 5 1.2 Survey demographics... 5 1.3 ICT budget changes... 8 1.4 ICT budget allocation by core technology area... 10 1.4.1 Hardware budget breakdown... 12 1.4.2 Software budget breakdowns... 14 1.4.3 Third party IT services expenditure... 16 1.4.4 Telecommunications budget... 20 1.5 ICT budget allocation by function... 22 1.6 Outsourced IT functions... 24 2 ICT investment priorities and vendor mindshare... 26 2.1 Introduction... 26 2.2 Core technology investment priorities... 26 2.2.1 Business intelligence... 28 2.2.2 Mobility... 32 2.2.3 Green IT & virtualization... 36 2.2.4 Cloud computing solutions... 40 3 ICT procurement trends... 44 3.1 Introduction... 44 3.2 Purchasing channels... 44 3.3 Business objectives influencing IT investment strategy... 46 3.4 IT objectives influencing IT investment strategy... 48 3.5 ICT provider selection... 50 4 Summary... 52 4.1 Rising consumer demand and emphasis on infrastructure development is driving Brazilian enterprises investment in ICT... 52 5 Appendix... 53 5.1 Definitions... 53 5.2 Further reading... 57 5.3 Contact the authors 57 ICT investment trends in Brazil P a g e 15 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

List of Figures Figure 1: Brazilian enterprise ICT survey industry breakdown... 5 Figure 2: Brazilian enterprise ICT survey breakdown by size band (number of employees)... 7 Figure 3: Recent and expected ICT budget changes among Brazilian enterprises... 8 Figure 4: Brazilian enterprises (external) ICT budget allocation, 2013 and 2014... 10 Figure 5: Brazilian enterprises average hardware budget allocation... 12 Figure 6: Brazilian enterprises average software budget allocation by technology... 14 Figure 7: Brazilian enterprises average IT services budget allocation... 16 Figure 8: Brazilian enterprises average IT consulting services budget allocation... 18 Figure 9: Brazilian enterprises average telecommunications budget allocation... 20 Figure 10: Brazilian enterprises ICT budget allocation by function, 2013 and 2014... 22 Figure 11: Outsourced IT functions - Brazilian enterprises current and future outsourcing priorities... 24 Figure 12: Current and future investment priorities of Brazilian enterprises across core technologies... 26 Figure 13: Business intelligence Brazilian enterprises current and future investment priorities... 28 Figure 14: Business intelligence vendor mindshare amongst Brazilian enterprises... 30 Figure 15: Mobility Brazilian enterprises current and future investment priorities... 32 Figure 16: Mobility vendor mindshare amongst Brazilian enterprises... 34 Figure 17: Green IT & virtualization Brazilian enterprises current and future investment priorities... 36 Figure 18: Green IT & virtualization vendor mindshare amongst Brazilian enterprises... 38 Figure 19: Cloud computing solutions Brazilian enterprises current and future investment priorities.. 40 Figure 20: Cloud computing solutions vendor mindshare amongst Brazilian enterprises... 42 Figure 21: Brazilian enterprises' preferred approach to buying technologies... 44 Figure 22: Business objectives which influence Brazilian enterprises' IT investment strategy... 46 Figure 23: IT objectives which influence Brazilian enterprises' IT investment strategy... 48 Figure 24: Factors influencing Brazilian enterprises' decision to choose an ICT provider... 50 List of Tables Table 1: Brazilian enterprise ICT survey industry breakdown... 6 Table 2: Brazilian enterprise ICT survey breakdown by size band (number of employees)... 7 Table 3: Recent and expected ICT budget changes among Brazilian enterprises... 8 Table 4: Brazilian enterprises (external) ICT budget allocation, 2013 and 2014... 10 Table 5: Brazilian enterprises average hardware budget allocation... 12 Table 6: Brazilian enterprises average software budget allocation by technology... 14 Table 7: Brazilian enterprises average IT services budget allocation... 16 Table 8: Brazilian enterprises average IT consulting services budget allocation... 18 Table 9: Brazilian enterprises average telecommunications budget allocation... 20 Table 10: Brazilian enterprises ICT budget allocation by function, 2013 and 2014... 22 Table 11: Outsourced IT functions - Brazilian enterprises current and future outsourcing priorities... 24 Table 12: Current and future investment priorities of Brazilian enterprises across core technologies... 27 Table 13: Business intelligence Brazilian enterprises current and future investment priorities... 28 ICT investment trends in Brazil P a g e 16 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997

Table 14: Business intelligence vendor mindshare amongst Brazilian enterprises... 30 Table 15: Mobility Brazilian enterprises current and future investment priorities... 32 Table 16: Mobility vendor mindshare amongst Brazilian enterprises... 34 Table 17: Green IT & virtualization Brazilian enterprises current and future investment priorities... 37 Table 18: Green IT & virtualization vendor mindshare amongst Brazilian enterprises... 38 Table 19: Cloud computing solutions Brazilian enterprises current and future investment priorities... 40 Table 20: Cloud computing solutions vendor mindshare amongst Brazilian enterprises... 42 Table 21: Brazilian enterprises' preferred approach to buying technologies... 45 Table 22: Business objectives which influence Brazilian enterprises' IT investment strategy... 46 Table 23: IT objectives which influence Brazilian enterprises' IT investment strategy... 48 Table 24: Factors influencing Brazilian enterprises' decision to choose an ICT provider... 50 ICT investment trends in Brazil P a g e 17 www.kable.co.<us> / Kable Business Intelligence Limited / + 44 (0) 207 936 6997