Argentina Information Technology Report Q1 2012
Business Monitor International, January 2012, Pages: 60
Business Monitor International's Argentina 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 Argentina's information technology industry.
Argentina's IT spending is forecast by BMI to grow at a CAGR of 8% between 2012-2016, consolidating a strong performance in 2011. The PC market was boosted in 2011 by the government's education PC procurement. As well as growing interest in cloud computing, the second largest IT market in the region has other growth drivers, including rising PC penetration and incomes, and a high-tech national development plan.
The Argentine IT market is the second largest in Latin America. Per capita IT spending is forecast to rise from US$119 in 2012 to US$160 in 2016. The addressable market is dominated by the capital Buenos Aires, which accounts for 26% of household appliance sales, including computer hardware.
New cloud computing offerings and increased competition in this segment should fuel further demand from end-users to utilise this technology. Educational tenders will be another area of opportunity, with a tender to deliver 3mn PCs to public schools announced in April. Key prospects for enterprise resource planning (ERP) implementations and systems upgrades will include companies focused on regional expansion and export-oriented industries.
INDUSTRY DEVELOPMENTS
In November 2011, the government revealed that its Programa Conectar Igualdad (Connect Equality Programme) had so far covered 1.8m students and teaching staff. The programme, has a goal to distribute 3.8mn netbooks by the end of 2012. By the end of 2011 it was estimated that every student and teacher had a laptop with an internet connection in around half of the public secondary schools in Argentina. In 2011, the government introduced new regulatory compliance laws for electronic invoicing. The new requirements, which took effect for some industries on April 1, followed major changes in 2010 regulating electronic invoicing for Type E export invoices. The new regulations will now extend the requirement to domestic (Type A and Type B) invoices.
Also in 2011, a number of IT tenders at federal and provincial level were launched ahead of October's presidential elections. Federal government agencies such as the justice ministry were rolling out IT plans, while local governments including Cordoba and Santa Fe also called for tenders, as they look to update their computing resources.
COMPETITIVE LANDSCAPE
In 2011, the government's educational netbook tender, which aims to provide 3.7mn netbooks to students and teachers over the 2010-2012 period, had a significant impact on the PC market competitive landscape. One winner was Positivo CGH, a joint venture between Brazilian PC giant Positivo Factiva and Argentina's CGH. Positivo BGH got 23.2% of the notebook market in Argentina in Q311, largely owing to its success in winning a share of the education tender.
The public sector is a key target for vendors. In April 2011, a consortium formed by Argentine solution developer Unitech and regional IT distributor Aktio, won a US$4mn tender to modernise the management system of the judicial branch of Argentina's Mendoza province. Aktio is also bidding on a number of other government projects this year at federal as well as provincial level.
Software market leader Microsoft said the business of its Argentina and Uruguay subsidiary expanded 27% in the fiscal year ending 2011. Large accounts business was up 28% and SMB business was up 30%. Microsoft is working on Windows Phone 7.5 embedded smart phones and hopes that migrations to its Windows 7 operating system will also continue to drive local sales.
Computer Sales
BMI projects that Argentina's computer and accessories market will have a CAGR of around 6% over 2012-2016, reaching around US$3.5bn by 2016.
Government education tenders have been a major feature of the PC market in the past two years and will remain so in 2012, after providing around a 40% PC volume sales boost in 2011.
With PC penetration estimated at below 30%, there is still plenty of growth potential. Drivers include affordable PC programmes for households and schools, as well as growing broadband penetration, retail channel expansion, and the popularity of notebooks and netbooks.
Software
Argentina's software market is projected to be worth US$827mn in 2011 and software CAGR for 2012- 2016 is forecast at around 10%. Software piracy is still above 70% and higher than in Brazil and some other Latin American countries, although law enforcement agencies have mounted periodic crackdowns against illegal software.
Demand from SMEs for ERP applications should continue to grow, particularly in relatively untapped provincial areas. The main functional category currently remains ERP solutions, estimated to account for more than 80% of the enterprise software total. However, vendors will increasingly look to applications such as customer relationship management (CRM) and business intelligence, where faster growth is projected.
IT Services
Argentina's IT services market is forecast at around US$1.3bn in 2012, following a return to double-digit growth in 2010. For a developing market, the percentage of Argentine IT market revenue generated by services is fairly typical at around 25%, although lower than some other countries in the region where the services share is already above 30%.
IT services revenue are expected to grow faster than the market as a whole, with organisations looking for help to utilise efficiencies from cloud computing. Led by the financial, telecoms, and public sectors, there is a trend towards bigger managed service and outsourcing deals in key sectors of the local market. However, traditional services such as desktop support are still the mainstay.
E-Readiness
Argentina has one of the most dynamic telecoms markets in the region, with a dramatic expansion in the number of mobile subscribers in the past few years. Fixed-line penetration is among the highest in Latin America, providing a good platform for strong growth in broadband services adoption.
Executive Summary
SWOT Analysis
Argentina IT Sector SWOT
Argentina Telecoms Industry SWOT
Argentina Political SWOT
Argentina Economic SWOT
Argentina Business Environment SWOT
Business Environment Ratings
Table: Regional IT Business Environment Ratings
IT Markets Overview
Latin America
IT Penetration
Market Overview
Government Authority
Industry Forecast
Table: Argentina's IT Sector – Historical Data & Forecasts (US$mn Unless Otherwise Stated)
Industry Forecast Internet
Table: Telecoms Sector – Internet – Historical Data & Forecasts
Macroeconomic Forecast
Table: Argentina – Economic Activity
Competitive Landscape
Hardware
Software
Company Profiles
Microsoft
Dell (Argentina)
Sicsa
Country Snapshot: Argentina Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education
Table: Life Expectancy, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Manufacturing Wages, 1995-2001
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- Dell (Argentina)
- Microsoft
- Sicsa
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