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Argentina Information Technology Report Q4 2010
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Argentina Information Technology Report Q4 2010

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Argentina's IT spending is forecast by BMI to grow at a compound annual growth rate (CAGR) of 14%over 2010-2014, with spending picking up in 2010 after a contraction in 2009. The IT market is …

Argentina's IT spending is forecast by BMI to grow at a compound annual growth rate (CAGR) of 14%over 2010-2014, with spending picking up in 2010 after a contraction in 2009. The IT market is expectedto grow by around 13% in 2010, faster than domestic GDP growth. In H110 there was a sharp rise inimports of computers, which were up 76.8% year-on-year, according to figures from customs.The Argentine IT market is the second largest in Latin America. Despite the current economic crisis, thetotal value of spending on IT products and services should pass US$3.9bn in 2010 and approachUS$6.6bn by 2014. Per capita IT spend is seen as rising from US$98 in 2010 to US$158 in 2014 as themarket approaches levels last seen before the crisis of 2001. The market is dominated by the capitalBuenos Aires, which accounts for 26% of household appliance sales, including computer hardware.In 2010, government spending should be a growth area, after a quiet 2009 for government hardwaretenders, with particular opportunities in the education sector. Educational tenders will be a particular areaof opportunity, with a tender to deliver 3mn PCs to public schools announced in April. Key prospects forenterprise resource planning (ERP) implementations and systems upgrades will include companiesfocused on regional expansion and export-oriented industries.Industry DevelopmentsIn April 2010, the Argentine government was preparing to launch a tender to provide 3mn PCs to publicschools nationwide. The programme, called Conectar Ingualdad, was announced by President CristinaFernndez. The tender will be run through state social security agency ANSES, with the 3mn PCs due tobe distributed in early 2011.The announcement of the government tender for 3mn notebooks computers for schools, again raisedquestions about the domestic computer industry's production capacity. The government has ruled that halfof the PCs must be manufactured in Argentina, which over three years would add at least another 500,000computers to annual production. Many experts have argued that this will be difficult, but the most likelyapproach to achieve this is likely to be through joint ventures between local and multinationalmanufacturers.October 2009, Argentina's senate approved a controversial bill aimed at imposing new taxes on luxuryitems, including electronics products. The law doubled value-added tax (VAT) on affected goods from10.5% to 21%. However, after industry lobbying, notebooks and netbooks were excluded from theproposed tax. The government said that the intention behind the proposed tax hikes was to provideassistance to the electronics manufacturing hub of Tierra del Fuego.Competitive LandscapeIn July 2010, Microsoft estimated that around 500,000 Windows 7 licenses had been sold in Argentinasince the October 2009 launch of the operating system on the local market. Microsoft forecast that saleswould rise 20% in the second half of 2010, with business demand growing 30%. Software market leaderMicrosoft Argentina expected revenues to rise 24% to around US$100mn in FY09, which ended in June2009.HP accounted for the largest share of PCs imported in H110, with 27%, according to customs data,followed by Dell with 17% and 15.3% for Lenovo. These figures did not include locally assembled PCs,which typically account for around 60% of the total. In mid-2010, Intel, which won another recentgovernment education PC tender, was among those companies expected to bid for the newly announcededucation sector tender.A major area of opportunity for IT services vendors will be public and private sector organisation demandfor help to utilise cloud computing solutions. Software giant SAP has formed an alliance with IBM,Linux systems integrator Red Hat and Argentine telecoms company Metrotel to offer hosted solutions inArgentina. Government is expected to be a key vertical and, in June 2010, Japanese giant NECannounced the launch of a cloud computing base general education system for the Ministry of Education

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  • 1. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Argentina Information Technology Report Q4 2010Published on October 2010 Report SummaryArgentinas IT spending is forecast by BMI to grow at a compound annual growth rate (CAGR) of 14%over 2010-2014, with spending picking up in 2010 after a contraction in 2009. The IT market is expectedto grow by around 13% in 2010, faster than domestic GDP growth. In H110 there was a sharp rise inimports of computers, which were up 76.8% year-on-year, according to figures from customs.The Argentine IT market is the second largest in Latin America. Despite the current economic crisis, thetotal value of spending on IT products and services should pass US$3.9bn in 2010 and approachUS$6.6bn by 2014. Per capita IT spend is seen as rising from US$98 in 2010 to US$158 in 2014 as themarket approaches levels last seen before the crisis of 2001. The market is dominated by the capitalBuenos Aires, which accounts for 26% of household appliance sales, including computer hardware.In 2010, government spending should be a growth area, after a quiet 2009 for government hardwaretenders, with particular opportunities in the education sector. Educational tenders will be a particular areaof opportunity, with a tender to deliver 3mn PCs to public schools announced in April. Key prospects forenterprise resource planning (ERP) implementations and systems upgrades will include companiesfocused on regional expansion and export-oriented industries.Industry DevelopmentsIn April 2010, the Argentine government was preparing to launch a tender to provide 3mn PCs to publicschools nationwide. The programme, called Conectar Ingualdad, was announced by President CristinaFernández. The tender will be run through state social security agency ANSES, with the 3mn PCs due tobe distributed in early 2011.The announcement of the government tender for 3mn notebooks computers for schools, again raisedquestions about the domestic computer industrys production capacity. The government has ruled that halfof the PCs must be manufactured in Argentina, which over three years would add at least another 500,000computers to annual production. Many experts have argued that this will be difficult, but the most likelyapproach to achieve this is likely to be through joint ventures between local and multinationalmanufacturers.October 2009, Argentinas senate approved a controversial bill aimed at imposing new taxes on luxuryitems, including electronics products. The law doubled value-added tax (VAT) on affected goods from10.5% to 21%. However, after industry lobbying, notebooks and netbooks were excluded from theproposed tax. The government said that the intention behind the proposed tax hikes was to provideassistance to the electronics manufacturing hub of Tierra del Fuego.Competitive LandscapeIn July 2010, Microsoft estimated that around 500,000 Windows 7 licenses had been sold in Argentinasince the October 2009 launch of the operating system on the local market. Microsoft forecast that saleswould rise 20% in the second half of 2010, with business demand growing 30%. Software market leaderMicrosoft Argentina expected revenues to rise 24% to around US$100mn in FY09, which ended in June2009.HP accounted for the largest share of PCs imported in H110, with 27%, according to customs data,followed by Dell with 17% and 15.3% for Lenovo. These figures did not include locally assembled PCs,which typically account for around 60% of the total. In mid-2010, Intel, which won another recentArgentina Information Technology Report Q4 2010 Page 1/5
  • 2. Find Industry reports, Company profilesReportLinker and Market Statisticsgovernment education PC tender, was among those companies expected to bid for the newly announcededucation sector tender.A major area of opportunity for IT services vendors will be public and private sector organisation demandfor help to utilise cloud computing solutions. Software giant SAP has formed an alliance with IBM,Linux systems integrator Red Hat and Argentine telecoms company Metrotel to offer hosted solutions inArgentina. Government is expected to be a key vertical and, in June 2010, Japanese giant NECannounced the launch of a cloud computing base general education system for the Ministry of Educationin Argentinas San Juan province.Computer SalesBMI projects that Argentinas computer and accessories market will have a CAGR of around 12% over2010-2014, reaching around US$3.5bn by 2014. Argentine sales of computer hardware are forecastto return to positive growth in 2010, as growing affordability combined with more credit options and taxconcessions have driven sales.With PC penetration only around 24%, there is still plenty of growth potential and penetration is expectedto rise to at least 28% by 2014. Going forward, drivers include affordable PC programmes for householdsand schools, as well as growing broadband penetration, retail channel expansion and the popularity ofnotebooks and netbooks.SoftwareArgentinas software market is projected to be worth US$686mn in 2010 and software CAGR for 2010-2014 is forecast at around 15%, despite the economic climate and high annual software piracy losses.This year should see a boost from systems upgrades deferred from 2009, when the economic crisis had animpact in public and private sectors.Demand from small and medium-sized enterprises (SMEs) for ERP applications should continue to grow,particularly in relatively untapped provincial areas. The main functional category currently remains ERPsolutions, estimated to account for more than 80% of the enterprise software total. However, vendors willincreasingly look to applications such as customer relationship management (CRM) and businessintelligence, where faster growth is projected.IT ServicesArgentinas IT services market is forecast at around US$1.1bn in 2010, with a return to double-digitgrowth after a sharp deceleration because of the economic contraction in 2009. For a developing market,the percentage of Argentine IT market revenues generated by services is fairly typical at around25%, although lower than some other countries in the region where the services share is already above30%.IT services revenues are expected to grow faster than the market as a whole, with CAGR for 2010-2014projected at about 17%. Led by the financial, telecoms and public sectors, there is a trend towards biggermanaged service and outsourcing deals in key sectors of the local market. However, traditional servicessuch as desktop support are still the mainstay.E-ReadinessArgentina has one of the most dynamic telecoms markets in the region, with a dramatic expansion in thenumber of mobile subscribers in the past few years. Fixed-line penetration is among the highest in LatinAmerica, providing a good platform for strong growth in broadband services adoption. Table of ContentExecutive Summary . 5SWOT Analysis .... 8Argentina IT Sector SWOT .... 8Argentina Information Technology Report Q4 2010 Page 2/5
  • 3. Find Industry reports, Company profilesReportLinker and Market StatisticsArgentina Telecoms Industry SWOT 8Argentina Political SWOT 9Argentina Economic SWOT . 11Argentina Business Environment SWOT .. 12IT Business Environment Ratings .. 13Latin America IT Business Environment Ratings .... 13Table: Regional IT Business Environment Ratings . 13Latin America Regional IT Markets Overview ... 17Argentina Market Overview ... 24Government Authority 24Background . 24Hardware .... 24Software . 27Services .. 29Industry Developments ... 31Industry Forecast Scenario ... 35Table: Argentina - IT Industry (US$mn Unless Otherwise Stated) ... 37Country Context .... 38Table: Consumer Expenditure, 2000-2012 (US$) ... 38Table: Rural & Urban Breakdown, 2005-2030 .. 38Internet .. 40Telecoms Internet Historical Data and Forecast ... 40Macroeconomic Forecast . 42Argentina Economic Activity.. 44Competitive Landscape ... 45Hardware .... 45Software . 47IT Services .. 49Company Profiles ... 51Microsoft 51Dell (Argentina) .... 52Sicsa . 53BMI Methodology ... 54How We Generate Our Industry Forecasts ... 54IT Industry .. 54IT Ratings Methodology .... 55Table: IT Business Environment Indicators .. 56Weighting .... 57Table: Weighting Of Components .. 57Sources .. 57Argentina Information Technology Report Q4 2010 Page 3/5
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  • 5. Find Industry reports, Company profilesReportLinker and Market Statistics Payment Information Please indicate the payment method, you would like to use by selecting the appropriate box. Payment by credit card Card Number: ______________________________________________ Expiry Date __________ / _________ CVV Number _____________________ Card Type (ex: Visa, Amex…) _________________________________ Payment by wire transfer Crédit Mutuel RIB : 10278 07314 00020257701 89 BIC : CMCIFR2A IBAN : FR76 1027 8073 1400 0202 5770 189 Payment by check UBIQUICK SAS 16 rue Grenette – 69002 LYON, FRANCE Customer signature:   Please note that by ordering from Reportlinker you are agreeing to our Terms and Conditions at http://www.reportlinker.com/index/terms Please fax this form to: Europe, Middle East and Africa : + 33 4 37 37 15 56 Asia, Oceania and America : + 1 (805) 617 17 93Argentina Information Technology Report Q4 2010 Page 5/5