Nearshore Blog

Is IT suffering from the slowdown in Brazil?

It’s no longer big news to note that Brazil is slowing down, its once dynamic economy is no longer climbing aggressively to the sky. This slowdown is having a clear impact on the local IT industry. After quite impressive Gross Domestic Production (GDP) growth in 2010, of 7.5%, the local economy expanded modestly 0.9% last year. For 2013, the International Monetary Fund (IMF) has recently lowered the prediction of growth from 3.5% to 3%, and it would not be surprising if that figure drops again – sometime soon.

IT managers don’t see terribly worried, though, and they see great potential in their industry in the upcoming years. IT has been living in a different, rarified universe the last few years, buoyed by widespread demand for both hardware and all kinds of more complex, cutting edge services.

In the Internet of Things, every object can be a device

One of the big societal and technological trends we are experiencing today is the shift to an environment where applications are everywhere. In the early going, we can be excused for thinking that the pervasiveness of software applications is reflected in mobile devices. After all, most of us now carry an application-enabled device, and see it as the nexus of mobile application development.

And we’re right, insofar as mobile platforms from iOS, to Android, Windows Phone 8, and BlackBerry, are the sandboxes where the world’s most talented developers are strutting their stuff. Some of these apps are truly disruptive, and are changing the way we live. But where we are headed is an application environment that is far richer than having a bunch of apps on your smartphone – or even the cloud. In the future, every object will have the potential to have an application imbedded in it. As a result, the world will be a whole lot smarter.

Smaller In-House Data Centers Disappearing Rapidly

Recent data show that the trend of small and medium-sized business giving up in-house IT operations continues to gather steam. As prices come down and service offerings improve, the advantages of cloud-based IT services are simply too great for businesses to ignore. When you couple this with the difficulty in finding top quality IT professionals to run the data centers many businesses are already encountering today, the choice to migrate to the cloud becomes even more obvious.

Gartner analyst Jon Hardcastle sums up the current situation. "We are definitely seeing a trend away from in-house data centers toward external data centers and external provisioning." Consulting firm IDC projects that managed service providers will account for 30% of all new data center space built through 2017.

Colombia’s 4G auction keeps it on the map

When I spoke to Ovum telecom analyst Peter Ryan earlier this year, one message came through loud and clear: Colombia is doing well when it comes to building its nearshore capabilities. Part of that story is the country’s imminent 4G auction, promising future network data transfer rates at five times 3G.

Now, Mr. Ryan and Ovum are also saying that the city of Barranquilla is emerging as Colombia’s new CRM outsourcing hub. Ovum analysts have found that Barranquilla, as a secondary outsourcing location, is benefitting from investment from abroad as well as from within Colombia. So far, Barranquilla has managed to keep up with the strong pace of growth, and can handle the overflow from Bogota. That said, Ovum did note that industry saturation is a risk – at least short-term – and that vendors need to work closely with government officials on the ground.

Clinton Global Initiative Latin America

Image by Center for American Progress.

The first Latin American Clinton Global Initiative will be held in Rio de Janeiro December 8-10, 2013. Following the great success of CGI Asia in 2008, the board of directors of CGI decided 2013 was an ideal time to focus the attention of the world on the unfolding success story of Latin America.  Former President Clinton made the announcement in New York City, at the May 6th mid-year meeting of CGI.

The Clinton Global Initiative was founded in 2005, and convenes leaders from around the world to develop innovative solutions to the most pressing challenges we face today.  CGI helps organizations from the private sector and public sector by fostering partnerships, providing strategic advice and driving resources toward effective ideas.

Although Latin American regional economic growth has slowed down over the last couple of years, economists expect the worm to turn by 2014. Nearly all project the region to rebound strongly, especially if Latin American nations continue to increase investment in infrastructure and continue inching down the path of free market economic reform.  CGI Latin America gives regional leaders an opportunity to work together on impact sourcing and other low-income initiatives make sure that economic and social development occur hand in hand.

In Mexico, mobile payments show potential

A recent report titled “Mobile and Alternative Payments in Mexico” argues that Mexico’s mobile payments industry is on the verge of some significant growth, though uncertainty on the legislative front, as well as cultural and economic challenges, suggest a cautionary view has merit.

The report, from market research firm Packaged Facts, is impressive in its thoroughness. Important findings include the leadership role of Telcel, which is owned by América Móvil, and the fact that all of Mexico’s major banks have ambitious initiatives in place to enable smartphone access.

As a result, Mexico’s banking system could transform itself in short order. The big reason is the penetration of smartphones into consumers’ hands. The report says that the financial system is moving to transform how remittances and branch banking are handled, and that mobile technology has the ability to address regional and demographic disparities.

Global Economic Slowdown Threatens Latin American Growth

Global economic growth is slowing to a trickle in 2013. The Economist recently revised its Eurozone economic growth projections from a tepid .4% to a depressing  -.7%, and also revised China's annual projected 2013 economic growth from 8.4% to 8%. U.S. 2013 growth is also being revised downward, with the International Monetary Fund retrenching projections from a relatively weak 2.1% annual growth rate to an anemic 1.9% growth rate. The IMF also recently reduced its global economic growth projections for 2013 from 3.5% to 3.3% percent.

Mercado de TI na América Latina é promissor, diz F&S

O Brasil, há alguns anos, era tido como o moto propulsor do crescimento na América Latina. Muitos países vizinhos, como Argentina, Uruguai, Chile, Peru e Colômbia se beneficiavam da maré positiva da economia do gigante sul-americano, que agora passa a caminhar a passos bem mais lentos. Esses “hermanos”, entretanto, têm conseguido se desenvolver plenamente com seus passos próprios, com boas taxas de desenvolvimento e crescimento – e isso também é válido para o setor de tecnologia da informação (TI) em cada um deles.

A empresa de pesquisa Frost & Sullivan (F&S) informou há poucos dias que o mercado de TI na América Latina (ao se considerar o conjunto de produção de hardware, software e serviços) aumentará 7% ao ano até 2014. A empresa de análise considera que, com a maioria dos países da região em crescimento inferior a 3%, os investimentos na área podem impulsionar o PIB (Produto Interno Bruto) da região como um todo. É uma aposta ousada, mas que faz totalmente sentido.

Latin American Digital Literacy Gradually Improving

Digital literacy rates, that is, the percent of the population that has regular access to the Internet, hit 80% in North America (U.S. and Canada) in 2013. Worldwide digital literacy rates are thought to approach 40%, with U.N. estimating that close to 50% of the world's population has little to no access to the Internet or even to a computer.

Although the recent trend shows improvement, Latin America continues to lag behind much of the rest of the world in digital literacy rates at just 48%. Not surprisingly, digital literacy rates are especially low in many rural areas. According to the UN's Global Information Technology Report 2013, the reasons for Latin America's laggard status are three-fold. "Although the region is vast and heterogeneous, three shared reasons for this lag can be identified: these countries all exhibit an insufficient investment in developing their ICT infrastructure, a weak skill base in the population because of poor educational systems that hinder society’s capacity to make an effective use of these technologies, and unfavorable business conditions that do not support the spur of entrepreneurship and innovation."

SMB Security Outsourcing Trend Gains Steam

Larger businesses have been outsourcing aspects of their IT security operations for decades. This had not been the case for smaller businesses until just the last few years. Aside from using third-party network security monitoring services, the large majority of SMBs have relied on their in-house IT teams for almost all of their security needs.

The advent of the cloud, and the growing realization of their vulnerability and the consequences of a security failure among SMB owners and managers, has led to a growing interest in security services among small businesses. According to Symantec’s 2013 Avoiding the Hidden Costs of the Cloud report, more than 90% of SMBs were at least discussing moving some services to the cloud, and over 80% of the 3000+ SMBs surveyed were actively considering email management or security management via the cloud.