- Published: February 2011
- Region: Colombia
Colombia Information Technology Report Q3 2010
- Published: July 2010
- Region: Colombia
- 54 Pages
- Business Monitor International
The Colombia Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Colombia's information technology industry.
Colombian IT spending is projected to grow at a compound annual growth rate (CAGR) of 11% over the 2010-2014 period as the market continues to mature. In H110, vendors reported that demand was up in both consumer and large company segments. The consumer-driven economic boom of recent years may have come to an end, but government programmes and growing computer affordability will support more spending on IT products and services.
IT spending is projected to grow 16% in 2010, with growth areas in both consumer and business segments. The economic outlook in 2010 remains mixed for the IT market, however, as key IT spending verticals like manufacturing are unlikely to return to 2007 growth levels for some time. Similarly, despite strong PC sales in January 2010, there is little short-term prospect of consumer growth returning to the 5%+ levels seen in the past few years.
The government sees increased information and communication technology (ICT) spending as a key means to advance its central strategic goal of helping the country reintegrate disaffected groups. Per capita IT spend is projected to rise by 43% from US$44 in 2010 to US$63 by 2014, while PC penetration has exceeded expectations and could reach 20% within our forecast period.
The Ministry of Communications assigned a COP1.5bn budget for the national plan for ICT (PNTIC) for the 2008-2010 period, with the money channelled through the Communications Fund. The 2008-2010 PNTIC sets out a number of targets for 2010, including boosting the percentage of municipalities with broadband access to 70% and increasing the number of households with broadband access to 40%. In early 2009, local Colombian software developers association Fedesoft said that it expected further action from the national government during that year to support the domestic software industry. The government had been working on a general software law that was on track to be approved by the end of 2009 or early 2010. The law is expected to include measures such as allowing investments in software to be amortised and depreciated like other capital investments.
The government is pressing ahead with its computers for education (Computadores para Educar) programme, which has delivered 161,300 computers to schools since 2001, according to government data. The programme has piloted Microsoft Windows XP versions of the One Laptop Per Child (OLPC) XO laptop.
The Colombian unit of Lenovo reported 33% growth in 2009. In October of that year, Lenovo stepped up its campaign to penetrate Colombia’s retail PC segment. Lenovo plans to expand its retail sector presence through expanding channel partnerships and its new desktop and laptop series will be distributed through the companies MPS, Quorum, SED, Cubix and Makrocomputo.
One significant local market growth area is SAP-related consulting. In April 2010, Chilean IT consultancy ActualiSAP announced that it was expanding into the Colombian market and would open a Colombian office this year. Meanwhile, HP has partnered with SAP on its online solution ‘Business Allin- One Fast-Start’, while Neoris has expanded its operations by establishing a new unit in Colombia that offers IT consulting, systems integration, business operations and outsourcing services. In H110, US vendor Citrix Systems was one vendor to report growing interest in virtualisation from Colombia’s public sector and launched a new subsidiary in the country to take advantage of the potential opportunity. Meanwhile, the official launch of Indian IT firm Tata Consultancy Services (TCS)’s new Colombia office highlighted the growing opportunities in the local financial services sector, which accounts for around 50% of TCS’s regional revenues.
PC sales are projected at US$973mn in 2010, following strong growth in the first half of the year, and should pass the US$1.4bn mark by 2014. Retail PC sales surged in January 2010, according to official data, supporting projections of a market bounce-back in 2010 in line with private consumption. Businesses are expected to maintain a cautious attitude to IT investments in 2010, however. Colombian PC penetration reached 12.8% as of mid-2009, surpassing the government’s previous 2010 target of 10.8%. The main long-term drivers of growth in the Colombian PC segment are lower prices and greater affordability. Notebook sales drove significant growth in 2009 and accounted for over 50% of PC shipments for the first time.
Colombia’s software market is projected to be worth US$378mn in 2010 and software CAGR for 2010- 2014 is forecast at around 11%. Software has opportunities for growth over the next few years although, in the near term, strong economic headwinds will lead some companies to defer system updates. Software piracy was estimated to account for 56% of software in 2008, down considerably from the rate a few years ago.
Vendors reported strong business software demand growth in H110, particularly among larger and medium companies. Most demand in the near term will be for basic solutions, such as enterprise risk management (ERM) and supply chain management systems.
Colombia’s IT services spending is projected at around US$781mn in 2010, with 16% growth compared with 2009. The percentage of IT market revenues generated by services is currently around 39%, high by emerging market standards and above the regional average. The majority of demand, around 75%, still comes from the large company sector.
In Colombia, several sectors have particular potential, including financial services and utilities, with Isagen and Empresa de Energia de Cundinamarca awarding some large tenders. In the last year or two, there has been a trend towards bigger managed service and outsourcing deals. SHOW LESS READ MORE >
- Colombian IT Sector SWOT
- Colombian Telecoms Industry SWOT
- Colombia Political SWOT
- Colombia Economic SWOT
- Colombia Business Environment SWOT
IT Business Environment Ratings
- Latin America IT Business Environment Ratings
- Regional IT Business Environment Ratings
Latin America Regional IT Markets Overview
Colombia Market Overview
- Government Authority
- Banking Sector Investments
- Industry Developments
Industry Forecast Scenario
- IT Industry Forecast
- Table: Colombia’s IT Industry (US$mn Unless Otherwise Stated)
- Table: Chile Telecoms Sector – Internet – Historical Data And Forecasts
- Table: Colombia – Economic Activity, 2007-2014
- IT Services
- Internet Competitive Landscape
- Dell (Colombia)
- HP (Colombia)
Country Snapshot: Colombia Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
- How We Generate Our Industry Forecasts
- IT Industry
- IT Ratings – Methodology
- Table: IT Business Environment Indicators
- Table: Weighting Of Components