Although Brazil’s IT sector has frequently been compared as an up and coming challenger for India’s share of the offshore pie, Brazilian vendors are keener to position themselves as potential local partners rather than as nearshore alternatives. The reasoning is simple – with tremendous opportunity for growth existing locally, there is less motivation to pursue growth in untested and unknown markets. According to statistics provided by Brasscom, the domestic market for ICT is pegged around $123 billion in 2012 with a growth rate of about 10% year-on-year[i]. Moreover, the vendors lack serious muscle in terms of scale, and factors like limited availability of resources and an inability to differentiate on cost adds to this reluctance to compete with Indian offshorers.

Brazilian vendors differentiate on expertise in local market

The raison d'être of the Brazilian IT sector is quite different from that of India and is heavily focused on providing solutions and services to the huge domestic market that exists both within the country and in the rest of Latin America (Latam). Some key features of Brazilian vendors are:

  • Strong focus on local business’ needs. Most of the businesses in Brazil fall in the small and medium enterprise (SME) category and require a high level of customization of solutions and services to meet requirements, especially around local language interfaces and support. Most Brazilian vendors are very flexible and accommodative of these small clients’ needs for customization and for individually tailored pricing and delivery models.
  • Expertise in navigating local compliance requirements. Familiarity with the unique technology and compliance requirements for operating locally makes these vendors good partners for multinational companies setting up presence within Brazil and the Latam region.
  • Vendors are deeply entrenched in their clients’ businesses. This has allowed them to build substantial know-how about the business challenges that the shape technology requirements of their clients operating in Brazil and the Latam region leading to a strong focus on delivering real business value. This ‘stickiness’ also translates into geographical expansion strategies which mostly revolve around following the client as it expands presence abroad.
  • Creative solutions that clients can leverage across other emerging markets. Most of the vendors here have developed proprietary solutions and SaaS offerings for small businesses in sectors like agribusiness, oil exploration, and mining that clients can leverage in emerging markets like Africa, the Middle East, Eastern Europe and Asia.

Although Brazilian vendors are wells suited for supporting the local operations of clients, there are a few things that sourcing professionals should bear in mind when engaging with them. These include:

  • Lack of exposure to global best-practices. Most of the Brazilian vendors’ geographic exposure is limited to the Latam region and, except for a few, they do not have substantial experience across global markets. Clients can leverage their deep expertise in the local markets but need to be aware that this lack of international exposure translates into limited knowledge of global best-practices.
  • Ensure vendor has access to skilled resource pool. One of the major setbacks for the Brazilian ICT industry is the lack of resources with English-language proficiency and the fact that there aren’t enough technically educated people being churned out by the education system to meet demand. Clients need to ensure that their vendors have access to a steady supply of skilled talent to ensure scalability and sustained delivery-quality.


Figures from IDC but provided by Brasscom