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 CristinaFern

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Argentina Information Technology Report Q4 2010
Published on October 2010
Report Summary
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 expected
to grow by around 13% in 2010, faster than domestic GDP growth. In H110 there was a sharp rise in
imports 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, the
total value of spending on IT products and services should pass US$3.9bn in 2010 and approach
US$6.6bn by 2014. Per capita IT spend is seen as rising from US$98 in 2010 to US$158 in 2014 as the
market approaches levels last seen before the crisis of 2001. The market is dominated by the capital
Buenos 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 hardware
tenders, with particular opportunities in the education sector. Educational tenders will be a particular area
of opportunity, with a tender to deliver 3mn PCs to public schools announced in April. Key prospects for
enterprise resource planning (ERP) implementations and systems upgrades will include companies
focused on regional expansion and export-oriented industries.
Industry Developments
In April 2010, the Argentine government was preparing to launch a tender to provide 3mn PCs to public
schools nationwide. The programme, called Conectar Ingualdad, was announced by President Cristina
Fernández. The tender will be run through state social security agency ANSES, with the 3mn PCs due to
be distributed in early 2011.
The announcement of the government tender for 3mn notebooks computers for schools, again raised
questions about the domestic computer industry's production capacity. The government has ruled that half
of the PCs must be manufactured in Argentina, which over three years would add at least another 500,000
computers to annual production. Many experts have argued that this will be difficult, but the most likely
approach to achieve this is likely to be through joint ventures between local and multinational
manufacturers.
October 2009, Argentina's senate approved a controversial bill aimed at imposing new taxes on luxury
items, including electronics products. The law doubled value-added tax (VAT) on affected goods from
10.5% to 21%. However, after industry lobbying, notebooks and netbooks were excluded from the
proposed tax. The government said that the intention behind the proposed tax hikes was to provide
assistance to the electronics manufacturing hub of Tierra del Fuego.
Competitive Landscape
In July 2010, Microsoft estimated that around 500,000 Windows 7 licenses had been sold in Argentina
since the October 2009 launch of the operating system on the local market. Microsoft forecast that sales
would rise 20% in the second half of 2010, with business demand growing 30%. Software market leader
Microsoft Argentina expected revenues to rise 24% to around US$100mn in FY09, which ended in June
2009.
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 recent
Argentina Information Technology Report Q4 2010 Page 1/5

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government education PC tender, was among those companies expected to bid for the newly announced
education sector tender.
A major area of opportunity for IT services vendors will be public and private sector organisation demand
for 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 in
Argentina. Government is expected to be a key vertical and, in June 2010, Japanese giant NEC
announced the launch of a cloud computing base general education system for the Ministry of Education
in Argentina's San Juan province.
Computer Sales
BMI projects that Argentina's computer and accessories market will have a CAGR of around 12% over
2010-2014, reaching around US$3.5bn by 2014. Argentine sales of computer hardware are forecast
to return to positive growth in 2010, as growing affordability combined with more credit options and tax
concessions have driven sales.
With PC penetration only around 24%, there is still plenty of growth potential and penetration is expected
to rise to at least 28% by 2014. Going forward, drivers include affordable PC programmes for households
and schools, as well as growing broadband penetration, retail channel expansion and the popularity of
notebooks and netbooks.
Software
Argentina's 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 an
impact 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 ERP
solutions, estimated to account for more than 80% of the enterprise software total. However, vendors will
increasingly look to applications such as customer relationship management (CRM) and business
intelligence, where faster growth is projected.
IT Services
Argentina's IT services market is forecast at around US$1.1bn in 2010, with a return to double-digit
growth 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 around
25%, although lower than some other countries in the region where the services share is already above
30%.
IT services revenues are expected to grow faster than the market as a whole, with CAGR for 2010-2014
projected at about 17%. Led by the financial, telecoms and public sectors, there is a trend towards bigger
managed service and outsourcing deals in key sectors of the local market. However, traditional services
such as desktop support are still the mainstay.
E-Readiness
Argentina has one of the most dynamic telecoms markets in the region, with a dramatic expansion in the
number of mobile subscribers in the past few years. Fixed-line penetration is among the highest in Latin
America, providing a good platform for strong growth in broadband services adoption.
Table of Content
Executive Summary . 5
SWOT Analysis .... 8
Argentina IT Sector SWOT .... 8
Argentina Information Technology Report Q4 2010 Page 2/5

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Argentina Telecoms Industry SWOT 8
Argentina Political SWOT 9
Argentina Economic SWOT . 11
Argentina Business Environment SWOT .. 12
IT Business Environment Ratings .. 13
Latin America IT Business Environment Ratings .... 13
Table: Regional IT Business Environment Ratings . 13
Latin America Regional IT Markets Overview ... 17
Argentina Market Overview ... 24
Government Authority 24
Background . 24
Hardware .... 24
Software . 27
Services .. 29
Industry Developments ... 31
Industry Forecast Scenario ... 35
Table: Argentina - IT Industry (US$mn Unless Otherwise Stated) ... 37
Country Context .... 38
Table: Consumer Expenditure, 2000-2012 (US$) ... 38
Table: Rural & Urban Breakdown, 2005-2030 .. 38
Internet .. 40
Telecoms ' Internet ' Historical Data and Forecast ... 40
Macroeconomic Forecast . 42
Argentina ' Economic Activity.. 44
Competitive Landscape ... 45
Hardware .... 45
Software . 47
IT Services .. 49
Company Profiles ... 51
Microsoft 51
Dell (Argentina) .... 52
Sicsa . 53
BMI Methodology ... 54
How We Generate Our Industry Forecasts ... 54
IT Industry .. 54
IT Ratings ' Methodology .... 55
Table: IT Business Environment Indicators .. 56
Weighting .... 57
Table: Weighting Of Components .. 57
Sources .. 57
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