2009-11-04 08:23:02 - Peru Information Technology Report Q4 2009 - a new market research report on companiesandmarkets.com

www.companiesandmarkets.com/Summary-Market-Report/peru-informati ..

Peru´s IT spending is forecast to remain in positive territory in 2009, driven by double-digit PC sales
growth. Peru has one of the smaller IT markets in the Latin American region, but spending is projected to
grow at a compound annual growth rate (CAGR) of 13% over the 2008-2013 period, making it one of the
highest growth global IT markets. Total spending on

IT products and services is forecast to pass
US$1.8bn by 2013.
Despite strong growth in recent years, a PC penetration rate of less than 20% indicates that there is plenty
of potential for further development. The market has a significant geographic digital divide, with largely
untapped markets beyond the capital Lima, which accounts for at least 80% of all PC sales. The
government purchase of netbooks through the One Laptop Per Child (OLPC) programme was the key
driver in H109 and accounted for more than 80% of netbook shipments.
Peru´s IT market appears better placed than most others in the region to withstand the current global
economic headwinds. Per capita IT spending is projected to grow to US$58 by 2013, from around US$38
in 2009. The regional structure of the market will evolve, with slower growth likely in Lima, compared
with the Peruvian provinces.
Industry Developments
The government was expected to purchase up to 200,000 PCs for schools in 2009 through the OPLC
programme. In Q109 OLPC reportedly distributed more than 70,000 netbooks in Peru, and by July the
total had reached around 110,000. The procurements brought the total number of purchased through the
programme to around 250,000.
Peru´s government continues to focus on its agenda of information and communication technology (ICT)
for development. In 2008, the government re-launched a tender to roll out broadband to more than 1,000
rural communities. The contract is expected to initially connect 1,050 rural communities in Peru at a cost
of around US$11.5mn.
Another government priority this year is to strengthen the domestic software sector. Total domestic sector
output was projected by Peruvian software promotion agency Apesoft to reach around US$180mn in
2008, up from US$130mn in 2007. Software industry exports were expected to have been around
US$20mn, representing about 25% growth from the previous year´s total of US$16mn.
Competitive Landscape
Netbooks are expected by most vendors to be the biggest growth driver in 2009, but because of the OLPC
programme, but multinational brands had only a small share of this market in the first half of the year.
Sales of netbooks outside of the OLPC programme were only around 10,000 a month. Acer reportedly
was the brand netbook leader with a less than 5% share.
Software market leader Microsoft has predicted double-digit growth for Peruvian software sector sales
this year, and in July 2009 said that it would strengthen its local operations. In 2008, Microsoft signed a
deal with Peru´s education minister to supply Windows software for XO laptops distributed as part of the
´One Laptop Per Child´ programme, the first time that these computers have been distributed with
Windows.
As Peru´s installed computer hardware base expands, the country should attract more investment from
regional IT services players. In 2009 Colombian IT firm Consult-soft was reportedly considering
opening an office in Peru to provide Oracle-based enterprise resource planning (ERP) and customer
relationship management (CRM) consultancy and software services. Meanwhile, Chilean IT services
provider Solint planned to open an office in Peru in 2010.
Computer Sales
BMI projects that computer hardware will be the main driver of Peruvian IT spending this year, thanks to
a large government procurement of notebooks from the OLPC programme. Peru´s computer sales are
projected to reach US$823mn by 2013, growing at a projected CAGR of 13%. In H109, the PC market
surged with year-on-year (y-o-y) notebooks shipments growth in the region of 50%, although desktop
shipments declined.
Annual PC sales are projected to reach 1mn by 2013. Growing affordability has much to do with this.
Laptop prices have virtually halved since 2006, when the average price was around US$1,200, compared
with around US$650 in 2008. Government programmes and demand outside the capital Lima is likely to
fuel growth over the next few years.
Software
Peru´s software market is projected to be worth US$124mn in 2009, with the market reaching a value of
US$210mn by 2013. Growth is expected to be relatively subdued in 2009, at less than 5%, but there will
continue to be areas of opportunity, not least due to the continued expansion of PC sales. Peru is also one
of the fastest growing regional markets for ERP solutions, with growing regional competition, and
opportunities, a result of the US free trade agreement (FTA), fuelling investment.
Faced with more, and often larger, competitors, even smaller Peruvian exporters will want to reduce costs
and gain competitiveness. There should be a demand to improve processes such as finance, accounting,
sales and inventory. The majority of current demand, in functional terms, is for ERP and supply chain
management (SCM). There is a small but growing market for custom solutions.
IT Services
Peru´s IT services market is projected to grow at a 16% CAGR in the 2009-2013 period. For a developing
market, the percentage of IT market revenues generated by services is high, at around 32%, although this
is in line with the region and lower than for Brazil.
The economic situation may have an impact on projects in some verticals, with the economic slowdown
reducing demand for ´intangible´ services such as consulting, but also driving outsourcing from some US
organisations.The growing level of investment in recent years in corporate management solutions is
translating into demand for support and maintenance as well as more sophisticated IT services.
E-Readiness
Recent data from Peru´s national statistics institute, IENI, suggests that nearly 75% of internet users use a
public access point, compared with just 18.8% of users who use the internet at home, and 12.1% at work.
Mobile telephony penetration is continuing to increase significantly and was up to 45.02% in Q307, up
31.3% y-o-y.
The World Economic Forum ranked Peru 78th in the world in its most recent survey of ´e-readiness´, but
cited improvements in some institutions including those within the judicial, police and educational
spheres.