Technology

5G will generate $2.7 billion in new business revenue up to 2022, says IDC

The consultancy firm expects the tech and telecom market in Brazil to grow by 7.1% in 2021 and reach US$64.4 billion in spending

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61% of companies in Brazil are betting on security as one of the main technology initiatives to focus efforts on in 2021, according to IDC Brazil, while 52% of respondents told the consultancy company that intelligence – comprising big data, analytics, business intelligence, artificial intelligence, and machine learning – will be their main initiative in the sector.

The kick-off of a 5G mass use, cloud as a key element for IT infrastructure as well as for security solutions and for management platform; in addition to solutions with embedded AI are some of the highlights IDC Brazil presented during the launch on Thursday of its 10 predictions for the market in 2021.

The forecast for the ICT market in Brazil, which is expected to grow by 7.1% in 2021 and reach $64.4 billion, is part of the IDC Predictions study that forecasts market trends for the 110 countries where the consultancy company operates. When considering only the IT market, the forecast is for an increase of 11.1% and, for telecom, a timid growth of 1.9%, pushed by digital services. In the corporate market, which includes software, services and hardware, IDC expects a 9.7% growth for the year.

READ ALSO: 90% of large enterprises in Latin America will invest to turn their processes contactless, says IDC Latin America

Manager of the telecommunications and ICT markets at IDC, Luciano Saboia highlighted the 5G not only as an asset to bring more speed in connectivity but as an enabler for other technologies’ adoption, such as cloud, IoT, ad computing, applications, and software in general. For IDC experts, 5G in Brazil will be focused primarily on the B2B segment.

“Currently, we have the connectivity services offer in a very transactional way. In order to make its best use, we will need a linked format with a focus on providing connectivity services. Soon we will see tech service providers specialized in verticals,” he pointed out, adding that Brazil will have the elements for the beginning of 5G mass use in 2021 with the frequencies auction and large-scale implementation by the operators.

$ 2.7 billion

is the amount 5G will generate in new business revenue involving AI, AR, VR, BD&A, IoT, cloud, security and robotics in 2021/2022, according to IDC

Cloud is no longer seen as an isolated item to become a platform for technology adoption. This shows the maturity of cloud usage in Brazil.

denis arcieri, Country manager at idc brazil

READ ALSO: Despite the pressure from telecom carriers, Brazil’s government will not change 5G auction ordinance: sources

Cloud is another big forecast of the consultancy company for the Brazilian tech market, being featured in three out of the ten predictions. “Recently, we started talking about how companies are embracing the cloud. It’s a fast way to expand IT operational resilience,” explains Luciano Ramos, research and consultancy manager at IDC Latin America.

In the outsourced cloud market, total spending with infrastructure and platforms as services – IaaS and Paas, such as big data – is expected to reach US$ 3 billion in 2021, an increase of 46.5% year-over-year. The private cloud model also grows at a good pace, reaching US$ 614 million in 2021. The main growth comes from private clouds as a service (DCaaS), which will increase by 15.5% compared to last year.

25%

of large enterprises in Brazil are already using AI and machine learning in their own projects

“AI is becoming a central element to deal with the volume of transactions, of events, of collected data. This is where this technology will bring benefits. Security solutions are perhaps the ones that are most benefiting from AI,” Ramos stresses.

However, companies are still adapting to this reality, as over 75%
of them have some kind of human oversight to validate AI results.

According to IDC, with more use cases and applications, spending on AI in Brazil will reach US$ 464 million in 2021, driven mainly by IT and business consulting services. Automated service agents and digital assistants in corporate applications will continue to drive market growth, with rates close to 30% over 2020.

READ ALSO: 5G auction bidders will have to expand the internet network in Brazil

As for spending on security solutions, both hardware and software, the consultancy firm expects over US$ 900 million in 2021, 12.5% more compared to the previous year. Cloud security solutions will grow, according to IDC, 29% in the year, grabbing a 23% share of all security solutions demand in the market.

Cloud technology also gains ground among management platforms. Currently, almost 43% of companies surveyed by IDC intend to take some of their management for the cloud over the next 24 months. For 31% of organizations, replacing a current application with one in SaaS is the favoured approach for modernizing workloads.

Spending on ERP solutions, considering features such as finance, accounting, people, logistics, supply chain, among others, will grow 12.6% in 2021, reaching US$ 3.4 billion. Of this amount, SaaS will represent 14%, predicts IDC.

When it comes to customer experience, including CRM solutions, marketing management, sales force and e-commerce solutions, spending in 2021 is likely to reach US$ 1.4 billion, a 21.3% growth compared to 2020.

As people spent more time at home due to social isolation measures, IDC also bets on the rise of smart home devices for 2021, with global sales volume for these products to grow by an average of 11.9% in the coming years. As for the Brazilian market, the consultancy firms expects an increase above the average: about 30%, excluding smart TVs.

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