The IT services market in Latin America is on pace to grow at a CAG (compound annual growth) rate of 10 percent over the next three years, according to a report from technology analyst firm TechNavio.
The report says businesses in the region are increasingly adopting could services. One of the main factors for this growth is the increasing government support to improve IT infrastructure in the region.
Programs like ‘Start-up Chile’, tech zones, and policy incentives like tax-breaks for smaller domestic enterprises, are also driving growth in the region’s tech industry.
But the research firm has warned that the growth could be slowed down by dwindling number of skilled labor and increasing attrition rate.
“Acquiring, retaining, and managing talent is one of the most challenging factors confronting organizations,” the report noted. The analyst firm said that the increasing adoption of cloud computing services and solutions is encouraging more software spending by SMEs.
”Global firms such as IBM, HP, SAP and Microsoft are increasing their investment in cloud services. As a result of the recent economic crisis, the adoption of cloud services and solutions such as software as a service (SaaS) has been on the rise. Companies such as Microsoft and SAP have been targeting small and medium-sized enterprises (SMEs) and large corporations with Microsoft online services offerings and Business All-in-One Fast-Start, respectively,” said TechNavio in a statement.
TechNavio’s report comes just days after Pyramid Research reported how telecom companies in Latin America were struggling to offer cloud services to small and medium enterprises.
Pyramid expects the Latin American SME cloud services market to consolidate, but predicts that telcos will spin out their cloud services divisions in the coming days.