The economic prosperity in the Latin America region and the adoption of technology by the countries in the region is slowly creating opportunity for Indian IT services industry. The region is slowly witnessing a transformation and the country is slowly prospering as global companies turn their eyes to the emerging markets for growth.
According to a study by global market intelligence and advisory firm International Data Corporation (IDC) in the Latin American region cloud, mobility, big data and social web are helping in economic prosperity and is creating a new intelligent economy, which is in turn is driving ICT ecosystem. “With markets stagnant in mature countries, Indian IT companies are looking at Latin America as the next frontier of growth. Big banks, telecommunication companies and large manufacturers have already started to outsource large chunks of their IT operations and its incumbent upon the industry to take advantage of this,” Jaideep Mehta, Vice-President and Country General Manager, IDC India said.
IDC had estimated the IT services market to be at $23.97 billion in 2011 and expects the IT services spending in the region to grow at 10.8 per cent per annum between 2011 and 2016. The study also said that with a $40 billion untapped market by 2016, cultural similarities and language barriers, Latin America presents a unique set of challenges to the industry.
According to IDC larger deals are happening in this region and some of the larger deals were $100 million, 5-year infrastructure outsourcing contracts that Banco de Credito del Peru awarded to IBM and Caixa Economica Federal in Brasil's 4-year outsourcing deal worth EUR 25.9 million with Indra Sistemas to develop and manage its financing and loans application.
Indian IT services companies which are dependent on the US and European market see emergence of Latin America as an opportunity. Cashing in on the emerging opportunity many Indian IT and BPO companies have already established presence in the region. For instance India's second largest IT services firm Infosys have a centre in Mexico catering to the needs of the local market and the company's client. Infy employs around 1,000 people in its centres in Mexico and Brazil. India's third largest IT exporter Wipro has three delivery centres in Latin America -- Curitiba, Rio de Janeiro and New Mexico City and has about 850 people. Another mid-tier IT services company UST Global also entered the Latin American market recently and is planning to hire around 5,000 people in the region within couple of years.
In technology, IT spending has outgrown the global average by 2X or more every year for the last ten years (2002-2011) in the region. The IT Market in Latin America is at $124b in 2012 and forecasted to grow to $166b by 2016, according to IDC BlackBook, Q1 2012.
