iMonitor IT (Brazil IT market survey)
Quarterly Survey Report - January 2021
2020 was an amazing year and 2021 will be exuberant
The IT market closed 2020 with 10.4% growth over the previous year. I didn't really think 2020 would be that good, and I'm even more impressed with the result of our recent survey where IT entrepreneurs stated their expectations for 2021.
Back in April 2020 we were all desperate, with buyers and sellers locked in their houses, and not knowing what was going to happen. The larger companies already knew how to work with their employees at home and ended the year with 12.9% growth. Smaller companies had a real hard time to set their "work from home" and ended the year with 10.2% growth.
As in any challenging year, we had a polarization with 17% of companies having worse results than 2019, and 76% of companies with better results than in 2019 and, in particular, a group of 13% of companies with growth rate over 30%.
And what will 2021 be like?
Interestingly, in this survey, appeared the effect we call "generalized caution", which had already appeared in the surveys of January 2017 and January 2019, and that makes entrepreneurs much more cautious and conservative in their expectations for market growth. They estimated an 11% growth for the IT market in 2021, however, they think their companies will grow well above the market average, reaching 22.2% growth.
I've been doing this survey in the IT market since 2008, so I can say, with a lot of experience, that neither the 11% nor the 22% are right. My forecast is that the market will end 2021 with 14% growth, which is an exuberant result. There are at least 10 factors that, together, will create an extremely favorable environment for the sale of technology.
Companies selling cloud products and services are predicting growth rates well over 30%. Those who sell infrastructure as a service (IaaS) predict more than 50% growth. And the percentage of revenue that will come from the sale of CLOUD products and services will grow from 28.9% in 2020 to 36.9% in 2021.
IT companies are predicting strong investments in hiring, marketing and sales, signaling their beliefs that 2021 will be a year of great opportunity. This is the second time we have seen a scenario with such a high expectation of investments. The first time was in early 2020, when entrepreneurs expected growth of 20% for the year, and so were planning high investments in employees, marketing and sales.
One fact worth highlighting in the survey is that smaller IT companies suffered the most in 2020, but they have learned to work differently and are the ones projecting higher growth rates for 2021.
The consumer market has learned from the crisis that technology is fundamental to survival and growth. Digital transformation projects have been greatly accelerated. Small companies have made the minimum necessary IT investments for survival in 2020, but they will have to make the right and proper investments in technology this year, opening up a great opportunity for those who sell technology to the SMB market.
We are facing a huge wave of opportunity, for IT companies that are trained and prepared to surf...
CEO - ADVANCE Consulting
About our surveys
ADVANCE does a quarterly survey to identify BRAZILIAN IT market growth, trends and opportunities. We interview a large number of IT entrepreneurs to understand business strategies and challenges. We have been doing this research since 2008 and the historical data allows us to establish trending algorithms, helping us to establish sharp predictions.
Topics that are addressed in this quarterly survey:
Financial results of IT companies in the last 2 years
Investments made in employee slated, marketing and sales
Expectations for the growth of the economy and IT market for the next 3 years
Main strategies adopted by IT companies
Planned investments in staff, marketing and sales
Internal and external variables that are taking it entrepreneurs' sleep away
Characteristics of IT companies with high growth rate