Nearshore Americas

Corporate IT Spending to Get Boost from Small Business

Corporate IT spending is on the mend among small and medium-sized businesses, including in Latin America, according to a new report.

Average annual budgets grew 8 percent to $132,000, compared to the budgets reported in the second half of 2010. Nearly a third of all SMBs plan to hire, particularly companies with fewer than 20 employees (33 percent). Fifteen percent plan to add part-time staff.

The numbers come from a survey of 3,000 IT professionals by social business network Spiceworks. The study was done in January and February of businesses with less than 1,000 employees.

Eight percent of the respondents were based in Latin America, Spiceworks said. The total network counts 1.4 million members.

“Small businesses are responsible for half of all IT spending,” said Jay Hallberg, co-founder and vice president of marketing for Spiceworks, which is based in Austin, Texas.

“All signs point to a good year for the IT industry as SMBs around the world significantly boost investments in technology products and services as well as staffing,” Hallberg said.

Other key points included a spike in cloud-based services, expected to rise to 42 percent adoption by mid-year. More than a quarter of IT budgets are now aimed at the cloud, the report said.

So-called virtualization of services is now becoming common, with 54 percent of small and medium-sized firms using them and another 20 percent expected to join the wave by mid-2011.

Medium-sized businesses could be picked off by venture funds anxious to deploy capital in the region to take advantage of recovery and new growth. Private equity has as much as $8 billion ready to spend in Brazil, according to a partner at Gávea Investimentos.

Piero Minardi put forth that figure at the Brazil Economic Forum in São Paulo this week, reports Bloomberg News. Gávea runs hedge funds and does wealth management, with offices in Rio de Janeiro and São Paulo.

Meanwhile, China’s massive, $300 billion sovereign wealth fund is considering a move into the region.

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Speaking at a forum in Beijing, the chairman of China Investment Corp., Jin Liqun, said that he saw opportunity in the region. He had just returned from visiting Brazil, Argentina, and Chile, according to Reuters.

“We are … optimistic on growth in Latin America and are prepared to increase our investment there,” Jin said at the forum. “Brazil is fast growing, but Chile and Colombia are also providing interesting opportunities for private equity investors.”

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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