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Peru Information Technology Report Q4 2009

Published by: Business Monitor International

Published: Oct. 15, 2009 - 44 Pages


Table of Contents


Executive Summary
SWOT Analysis
Peru IT Sector SWOT
Peru Telecoms SWOT Analysis
Peru Political SWOT Analysis
Peru Economic SWOT Analysis
Peru Business Environment SWOT Analysis
IT Business Environment Ratings
Regional IT Business Environment Ratings
Latin America Regional IT Markets Overview
IT Penetration
Market Growth And Drivers
Sectors And Verticals
Market Overview
Government Authority
Industry Developments
Industry Forecast
Table: Peru's IT Industry Indicators (US$mn unless otherwise stated) - Historical Data & Forecasts, 2006-2013
Country Context
Table: Rural/Urban Breakdown, 2005-2030
Table: Consumer Expenditure, 2000-2012 (US$)
Internet
Table: Telecoms Sector - Internet - Historical Data & Forecasts. 2006-2013
Macroeconomic Forecast
Table: Peru - Economic Activity, 2006-2013
Competitive Landscape
Hardware
Software
IT Services
Internet Competitive Landscape
Table: Regional Internet Penetration Estimates - 2008
Company Profiles
Dell (Peru)
SAP (Peru)
BMI Methodology
How We Generate Our Industry Forecasts
IT Industry
IT Ratings - Methodology
Table: IT Business Environment Indicators
Weighting
Table: Weighting Of Components
Sources

Abstract

Peru's IT spending is forecast to remain in positive territory in 2009, driven by double-digit PC salesgrowth. Peru has one of the smaller IT markets in the Latin American region, but spending is projected togrow at a compound annual growth rate (CAGR) of 13% over the 2008-2013 period, making it one of thehighest growth global IT markets. Total spending on IT products and services is forecast to passUS$1.8bn by 2013.

Despite strong growth in recent years, a PC penetration rate of less than 20% indicates that there is plentyof potential for further development. The market has a significant geographic digital divide, with largelyuntapped markets beyond the capital Lima, which accounts for at least 80% of all PC sales. Thegovernment purchase of netbooks through the One Laptop Per Child (OLPC) programme was the keydriver 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 globaleconomic headwinds. Per capita IT spending is projected to grow to US$58 by 2013, from around US$38in 2009. The regional structure of the market will evolve, with slower growth likely in Lima, comparedwith the Peruvian provinces.

Industry Developments

The government was expected to purchase up to 200,000 PCs for schools in 2009 through the OPLCprogramme. In Q109 OLPC reportedly distributed more than 70,000 netbooks in Peru, and by July thetotal had reached around 110,000. The procurements brought the total number of purchased through theprogramme 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 1,000rural communities. The contract is expected to initially connect 1,050 rural communities in Peru at a costof around US$11.5mn.

Another government priority this year is to strengthen the domestic software sector. Total domestic sectoroutput was projected by Peruvian software promotion agency Apesoft to reach around US$180mn in2008, up from US$130mn in 2007. Software industry exports were expected to have been aroundUS$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 OLPCprogramme, 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 reportedlywas the brand netbook leader with a less than 5% share.

Software market leader Microsoft has predicted double-digit growth for Peruvian software sector salesthis year, and in July 2009 said that it would strengthen its local operations. In 2008, Microsoft signed adeal 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 withWindows.

As Peru's installed computer hardware base expands, the country should attract more investment fromregional IT services players. In 2009 Colombian IT firm Consult-soft was reportedly consideringopening an office in Peru to provide Oracle-based enterprise resource planning (ERP) and customerrelationship management (CRM) consultancy and software services. Meanwhile, Chilean IT servicesprovider 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 toa large government procurement of notebooks from the OLPC programme. Peru's computer sales areprojected to reach US$823mn by 2013, growing at a projected CAGR of 13%. In H109, the PC marketsurged with year-on-year (y-o-y) notebooks shipments growth in the region of 50%, although desktopshipments 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, comparedwith around US$650 in 2008. Government programmes and demand outside the capital Lima is likely tofuel 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 ofUS$210mn by 2013. Growth is expected to be relatively subdued in 2009, at less than 5%, but there willcontinue to be areas of opportunity, not least due to the continued expansion of PC sales. Peru is also oneof the fastest growing regional markets for ERP solutions, with growing regional competition, andopportunities, 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 costsand 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 chainmanagement (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 developingmarket, the percentage of IT market revenues generated by services is high, at around 32%, although thisis 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 slowdownreducing demand for 'intangible' services such as consulting, but also driving outsourcing from some USorganisations.The growing level of investment in recent years in corporate management solutions istranslating 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 apublic 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, up31.3% y-o-y.

The World Economic Forum ranked Peru 78th in the world in its most recent survey of 'e-readiness', butcited improvements in some institutions including those within the judicial, police and educationalspheres.

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