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The Latin American Scenario Gartner The Future of IT Conference October 4-6, 2011 Centro Banamex Mexico City, Mexico Cassio Dreyfuss Donald Feinberg Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via email: [email protected]. Gartner is a registered trademark of Gartner Inc or its affiliates This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

Transcript of The Latin American Scenario - gartnerinfo.com mex38l_k1.pdf · The Latin American Scenario ... An...

The Latin American Scenario

Gartner The Future of IT Conference

October 4-6, 2011 Centro BanamexMexico City, Mexico

Cassio DreyfussDonald Feinberg

Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via email: [email protected]. Gartner is a registered trademark of Gartner Inc or its affiliates

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Gartner is a registered trademark of Gartner, Inc. or its affiliates.

The Latin American Scenario

Strategic Imperative: Enterprises, organizations and vendors in Latin America must balance the potential new opportunities and the issues afforded by high growth. This requires a strategic and realistic view of each new opportunity.

We see a critical turning point for enterprises and IT vendors with the following precarious issues:We see a critical turning point for enterprises and IT vendors with the following precarious issues:Strategy: Lack of a strategic perspective about the business impact of IT and IT services.New Opportunities: Lack of explicit strategies, and slow adoption of new technologies — especially cloud services.Management: Limited utilization of strategy, architecture and governance as strategic management tools and lack of investment in IT organization and management.

Where disciplined strategies will be needed to harness promising opportunities:Latin America Global Positioning: Improving economic conditions in Latin America not very heavily impacted by the crisis in the Northern Hemisphere.New Opportunities: Generally, low enterprise investment budgets supported by "IT as a service" approach, creating interesting opportunities for the SMBs.Human Resources: The DNA for Latin America resources is flexible, customer-centric, creative and agile.

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Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Strategic Imperative: Enterprises, organizations and vendors in Latin America must balance the potential new opportunities and the issues afforded by high growth. This requires a strategic and realistic view of each new opportunity.

We see a critical turning point for enterprises and IT vendors with the following precarious issues:We see a critical turning point for enterprises and IT vendors with the following precarious issues:Strategy: Lack of a strategic perspective about the business impact of IT and IT services.New Opportunities: Lack of explicit strategies, and slow adoption of new technologies — especially cloud services.Management: Limited utilization of strategy, architecture and governance as strategic management tools and lack of investment in IT organization and management.

Where disciplined strategies will be needed to harness promising opportunities:Latin America Global Positioning: Improving economic conditions in Latin America not very heavily impacted by the crisis in the Northern Hemisphere.New Opportunities: Generally, low enterprise investment budgets supported by "IT as a service" approach, creating interesting opportunities for the SMBs.Human Resources: The DNA for Latin America resources is flexible, customer-centric, creative and agile.

Page 2

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Market Trend: Latin America is third in GDP growth worldwide, a trend that will continue and become stronger for the next five years. Definition: BRIC (Brazil, Russia, India and China) is no longer an acceptable term. Emerging markets define a larger group of countries (not fixed to a specific four or five) with strong g g p ( p ) gGDP growth outlooks.

This slide shows the collective GDP growth around the world. The data is depicted in percentage growth for 2011 and g p p g g2012 (the source is HIS Global Insight, 3Q11). The impact of this kind of growth will result in significant changes in: (1) new technologies; (2) redefined packaging and pricing of technology and IT services; (3) government programs; (4) consumer markets; (5) credit markets ;and (6) green technologies.Latin America will continue to show strong growth in both GDP and IT, increasing the importance of the region as a global force in IT and other industries. An increasing number of Latin American companies will grow outside the region, such as Ambev (now AB InBev) becoming one of the largest brewing companies in the world Latin America hassuch as Ambev (now AB InBev), becoming one of the largest brewing companies in the world. Latin America has become a major target of investment funds, as corporations in the region continue to show growth and returns more than Europe and North America.Nominal GDP per capita for 2011 varies widely; however, of the primary countries, Argentina is 72nd at $12,236, Brazil is 68th at $12,225, Mexico is 71st at $10,666 and Uruguay is 64th at $13,417. Brazil and Mexico still top the list in real GDP for 2011, at 11th and 13th ($1,146.15 and $964.64 billion), respectively. Argentina ranks 29th at $265.8 billion (HIS Global Insight, September 2011).N t N i l GDP i GDP it t i l l th l f ll fi l d d i d d ithi

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Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Note: Nominal GDP is GDP per capita at nominal values: the value of all final goods and services produced within a nation in a given year, converted at market exchange rates to current U.S. dollars, divided by the average (or midyear) population for the same year.

The Latin American Scenario

Latin America's size is impressive: more than 20 million square kilometers (8 million square miles) and a population of more than p q ( q ) p p570 million. More than 30 countries, ranging in size from Brazil (3.4 million square miles) to tiny island states in the Caribbean, share a common origin — the Iberian Peninsula — and most countries speak two languages, with Brazilians speaking Portuguese as their first language and the others speaking Spanish.

A region of geographic contrasts, Latin America also shows socioeconomic contrasts that are remnants of colonial days. Diversity is everywhere.

Despite efforts in the past 50 years, the region still has to overcome difficult challenges, such as wealth distribution, healthcare, education, unemployment and, in some areas, social unrest ,as well as infrastructure in general. Country instability is still greater thaneducation, unemployment and, in some areas, social unrest ,as well as infrastructure in general. Country instability is still greater than in Europe and North America, although far less than in Southeast Asia and Africa (according to the Conflict Assessment SystemTool [CAST] from the Fund for Peace).

Countries in Latin America have followed a steadier course in the past 20 or 30 years, and , despite well-known problems, the potential for IT growth in Latin America is great. We believe that the major issues in the region are more focused on which segments of IT will have the greatest growth and how IT managers and CIOs can recognize the maximum ROI.

Today, more than just Mexico and Brazil are major contributors to the region. Argentina, Colombia and Peru are also included in emerging markets

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

emerging markets.

The Latin American Scenario

Key Issue: How does IT in Latin America compare with other regions?Market Trend: Latin America has strong software spending growth, second only to Asia/Pacific. Vendors are concentrating resources in this region, with high expectations for revenue growth.g

This slide is a summary of Gartner's regional IT spending forecasts for 2008 2011 and 2015 for the four major growthThis slide is a summary of Gartner s regional IT spending forecasts for 2008, 2011 and 2015, for the four major growth regions: Asia/Pacific; Latin America, the Middle East and Africa, and Eastern Europe. The estimated combined growth markets will reach $1.763 trillion in IT spending by 2015, or 39.7% of the total $4.444 trillion worldwide, with Latin America at 8.6% of the worldwide total.

In the emerging markets, the critical point is that overall IT spending by Latin American CIOs is projected to be second onlyto the Asia/Pacific region. This changes the balance of power in global IT decisions. The resulting direction will have a tremendous influence on major market segments. As a result, the opportunity to take advantage of significant channel i fl i iinfluencers is important.

According to "IT Key Metrics Data 2011: Executive Summary" (G00208190), the level of IT spending as a percentage of revenue in Latin America for 2010 was 3.2% as compared with Asia/Pacific, EMEA and North America (NA) at 2.9%, 3.7% and 3.5%, respectively. In addition, the IT spend as a percentage of operating expense was 4.1% in both NA and Latin America. Although relative to the sample size in both EMEA and NA, Latin America was small. It shows that Latin America needs to increase its IT spending more rapidly to come to parity with the more mature economies of the world. According to the same report, the Latin American IT budget increase in 2010 was 5.9%, more than double NA at 2.7%,

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

g p gdemonstrating that Latin America is increasing spending at an increasing rate.

For more details, see "Gartner Market Databook, 2Q11 Update" (G00214269).

The Latin American Scenario

Strategic Imperative: Latin America should seize the opportunity of budget growth, coupled with cost optimization to innovate with new systems, to support business growth.

The 2011 budget numbers for Latin America are no surprise Latin America has continued to increase budgetsThe 2011 budget numbers for Latin America are no surprise. Latin America has continued to increase budgets over the past years, while the worldwide numbers were low or negative. For 2011, the weighted number is zero; however, the unweighted number (average increase regardless of budget size) is 5.3%, as opposed to the worldwide average of 3.9%, according to the Gartner EXP 2011 CIO study: "Reimagining IT: The 2011 CIO Agenda" (G00210688). Further, only 19% of the participants in the study from Latin America showed the IT budget decreasing, while 37% showed the IT budget increasing. The primary drivers for this is a combination of the previous year's increases and the potential economic issues looking ahead. We also believe that the IT organizations throughout Latin America want to show value for IT and, therefore, are more conservative with increases until the value of previous increases are demonstrated.The critical decision the business and the CIO have to make is where to put budget allowances. As 2011 and 2012 unfold, the budgets in IT in Latin America is cause for IT providers to increasingly focus on regions such as Latin America. The region will see increased attention from incumbent providers, as well as growth among new providers and new technologies available in the region, all competing for a large portion of the budget.A C O h d h b l f h l b f

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Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Action Item: CIOs must insist that providers show business value of new technologies before committing to new technologies or vendors.

The Latin American Scenario

Strategic Imperative: Latin American CIOs must pay attention to all costs (especially cost of operations), even while trying to grow. Business priorities are in line with the world economic downturn.

For 2011 the business expectations for Latin America are not in line with the rest of the world as much asFor 2011, the business expectations for Latin America are not in line with the rest of the world, as much as they were last year. As BI and analytics drops in technical priorities (under the assumption that after many years in the first position, the systems are being implemented), the use of these systems has also moved down to priority No. 8. Help enterprise growth and improvements in business process has become a major expectation. Finally, Latin America is placing business expectations on servicing and retaining customers as the organizations become more global in focus.Latin American corporations are becoming more global by acquiring companies or opening subsidiariesLatin American corporations are becoming more global by acquiring companies or opening subsidiaries outside their own countries and, many times, outside the region. Some examples are America Movil, Cemex, Bimbo and Maseca from Mexico, and AB InBev, Embraer, Vale, Gerdau and Petrobras from Brazil.It is clear from the above priorities that Latin American CIOs understand that even in a stronger economy, returning to the ways of the past is not acceptable. Cost optimization remains an underlying theme for 2011 as the No. 4 priority, despite innovation appearing as No. 5. Cut cost but innovate seem to be contradictory priorities, but it also is happening worldwide.

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Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Action Item: Implement optimize costs in run the business budget to have money to spend in transformation/innovations.

The Latin American Scenario

Strategic Guideline: Strategic relationships between IT and the business units are a must, but Latin America has been behind in building these relationships. Latin America's IT must continue to place these relationships at the top of the priority list.

As with the business priorities the strategic priorities also emphasize business growth They only develop andAs with the business priorities, the strategic priorities also emphasize business growth. They only develop and manage flexible infrastructure, which is a CIO's dream: to develop agility required by business needs. Governance seems to be still difficult to be fully implemented in Latin America and continues to be priority No. 3. Use of BI has again moved up in importance in Latin America, as well as new versions of ERP. Other priorities also will help optimize costs — for example, improve business process, consolidate IT operations and resources, as well as implement cloud solutions. It is interesting that the alliance between IT and business is only the No. 10 priority; a better alliance could definitely help fund new projects as, in many cases, the business, not IT, has the budget for these projects.

The good news for Latin American organizations is that IT is placing the relationship with the business as the top priority, as can be seen by linking business and IT strategies. Latin America has lagged behind the rest of the world in this area, with IT traditionally dictating IT directions, mostly addressing operational support and, in some cases, alienating the business. This is a welcome, if slow-coming, change in the strategy. This stronger alliance between IT and business also assists IT in funding new projects as, in many cases, the business, not IT, h h b d f h j

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

has the budget for these projects.

The Latin American Scenario

Market Trend: Technology priorities are aligned in Latin America with the worldwide numbers, creating the same opportunities in Latin America that exist outside the region.

Several interesting points emerge from this study The most striking is that each year Latin America and theSeveral interesting points emerge from this study. The most striking is that each year, Latin America and the worldwide top 10 are more in agreement, although the ordering may be somewhat different. Latin American CIOs and the IT industry have, during the past five years, become more closely aligned. Second, as budgets are generally smaller in Latin America, a priority such as IT management tools are even more important than they are worldwide. Cloud computing, mobile technologies and virtualization are aligned with worldwide priorities. For the fifth year in a row, BI was among the top two priorities, and now it is No. 5; this does not mean it lost momentum, but CIOs may have the feeling that they have already implanted BI; but there is a long way to go with analytics really helping real-time decisions in the business. Interestingly, many of the other priorities, y y p g g y, y p ,such as BPM, enterprise applications and service-oriented architecture (SOA), are also affected by, or have an effect on, BI. Because BI has such a wide-reaching influence within the enterprise, it has remained one of the top two priorities for several years. There is a lack of expertise in these issues in Latin America. This is leading to a large outsourcing requirement for BI and data warehousing (DW). We expect to see the necessary skills appearing in the market during the next three to five years.Action Item: This is a global opportunity for firms with DW and BI skills to create a strong business model in Latin America that can eventually be leveraged outside the region.

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Latin America that can eventually be leveraged outside the region.

The Latin American Scenario

Key Issue: How is Latin America positioned for growth in IT services?

The collective impact of emerging markets on the growth and trajectory of IT spending is undeniable The dataThe collective impact of emerging markets on the growth and trajectory of IT spending is undeniable. The data in this slide is from the 2Q11 Gartner research "Forecast: IT Outsourcing, 2008-2015, 2Q11 Update," G00214321, 21 June 2011. $33 billion in 2011 is more than 10% of the total IT spend for Latin America; however, this will grow to over 12% of the total by 2014. The important number is that the CAGR for Latin American IT services is more than double the worldwide figure. For this reason, Latin America is gaining interest from local and international service providers. This is one the largest opportunities in emerging markets.

As the world is again starting an economic slowdown, Latin America is still showing strong growth. This is just one more reason the international providers are looking to Latin America for growth. This has been seen in the past 12 months with several international firms acquiring local providers to move more quickly into the region (e.g., Capgemini acquired CPM Braxis, and Diebold acquired Procomp). We believe moving into 2012, we will see move consolidation, acquisitions and new providers moving into the region.

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Market Trend: Latin America now has >25% of the leading offshore service locations worldwide with Colombia, Panama and Peru recently added.

It is hard to find an enterprise that is not somehow impacted by the globalization of its industry One recent statisticIt is hard to find an enterprise that is not somehow impacted by the globalization of its industry. One recent statistic highlighting the point shows that 80% of Fortune 100 enterprises in the U.S. are using some IT resources nearshore or offshore. Furthermore, Gartner estimates that the level of IT spend using a global delivery model exceeds $70 billion. The sourcing of IT services is pervasive and enterprises are consistently evaluating one or more country destinations to source IT services in a nearshore or offshore delivery model.

Many organizations that choose to move IT services to lower-cost countries are daunted by the task of determining which country (or countries) would best host their operations.

During the past 12 months, there has been significant activity in many countries to consolidate or grow their positions as leading locations for offshore services. The result is that there were several changes in the counties in the top 30 list. Latin America, Colombia and Peru were added, and Panama returned. Uruguay and Canada were dropped from the Americas. Several others were added, such as Sri Lanka, Bangladesh and Mauritius.

Related Gartner Research: "Gartner's 30 Leading Locations for Offshore Services, 2010-2011," G00209224

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Tactical Guideline: When undertaking a sourcing initiative, consider and evaluate countries in the Americas region as attractive alternatives to strike a convenient balance between offshore and nearshore opportunities.

Gartner has completed its annual analysis of 30 countries to assess their capability and potential as offshoreGartner has completed its annual analysis of 30 countries to assess their capability and potential as offshore service locations. We have identified 10 categories that we believe are important to consider when looking at a potential location for offshore or nearshore IT or business process services. Each category has been rated on a five-point scale from poor, through fair, good, very good and excellent. This provides an at-a-glance view of the current comparative status of that country, although a more detailed level of assessment was used to arrive at this simple categorization.

Here we depict a snapshot of some of the results of Gartner's report on the top 30 countries described on theHere, we depict a snapshot of some of the results of Gartner s report on the top 30 countries described on the previous slide. All 30 countries do not fit on one slide; therefore, we selected many of the Latin American countries that were assessed in the report: Argentina, Brazil, Chile, Colombia, Mexico and Peru. Currently, the two largest markets are Brazil and Mexico. In addition, we selected the three countries that, along with Brazil, constitute emerging countries: South Africa, India and China.

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Market Trend: Latin America is home to many strong offshore service providers and supports offshore facilities for many international service providers.

The top 10 global market share leaders account for 27 8% of the worldwide professional services market withThe top 10 global market share leaders account for 27.8% of the worldwide professional services market, with the remaining portion being a vast group of small providers that often focus on targeted areas. Thus, the overall market is fragmented, because literally hundreds of providers globally make up the remaining 72.2% market share. Increasingly, many of these emerging providers have set up their delivery centers in many of the offshore countries that were already discussed.

The growth rate of numerous emerging vendors is outpacing the industry average (estimated at 8%) by more than 20% This is from a small base of revenue; nevertheless the increasing competitiveness presents thethan 20%. This is from a small base of revenue; nevertheless, the increasing competitiveness presents the most-important opportunities to buyers in the form of more-robust options.

Gartner tracks more than 100 offshore providers from more than 30 countries. Overall estimates indicate there are more than 10,000 service provider vendors at a worldwide level. This creates a great deal of competition and forces vendors to address buyer demand to succeed. New lines continue to be drawn. The bar is being raised to a global standard versus old national boundaries. Now, there is a new norm for acceptable process-driven application development. All other areas of complacency, inefficiency and ineffectiveness are the focus

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MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

pp p p y, yfor the next wave of service.

The Latin American Scenario

Key Issue: What will be the key IT technology trends in Latin America during the next five years?Strategic Imperative: Companies should factor the top 10 technologies into their strategic planning process and make deliberate decisions about them during the next two years. This p g p g ydoes not necessarily mean adoption and investment in all of the listed technologies.

A number of topics remain on the list but with a new emphasis Cloud Computing continues to mature with more vendorsA number of topics remain on the list, but with a new emphasis. Cloud Computing continues to mature, with more vendors providing private services or technologies to create private implementations to address concerns with security and control. Next-Generation Analytics extends the focus on real-time predictive to include collaboration and other new capabilities that promise to bring business intelligence to a wider user group and apply it to more business scenarios. Social Communications and Collaboration recognizes the continuing interest in and importance of social software as it relates to internal communication and collaboration, customer-facing websites, and public social networking. Mobile applications remains from the 2010 list, but has grown as Apple's launch of the iPad spurred interest in tablets by certain consumer segments driving IT to evaluate when, where and how this form factor should be used in a business context. Storage class memory highlights the importance of various in-memory models that will have a significant impact on many analytical and transactional applications through 2015models that will have a significant impact on many analytical and transactional applications through 2015. Five were added to the list for 2011. Social Analytics is a trend that intersects next-generation analytics and social communications and collaboration, and feeds into mobile applications and context-aware computing. This pivotal role will become more apparent and the technologies to support social analysis more important over the next three years. Context-Aware Computing is a broad trend that will have an increasingly important impact on systems over the next three years. Video is reaching a prominence and adds new information types to process, store and search. Fabric Computing is now starting to appear, and will evolve significantly over the next three to five years to provide highly flexible systems to support the dynamic needs of public and private cloud computing. The long-term shift to Ubiquitous Computing is resulting in smarter objects used for operational purposes in the business, which brings

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MEX38L_101, 10/11

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complications dealing with a huge number of networked OT devices and an explosion of transactions coming from the OT into IT systems.

The Latin American Scenario

Strategic Planning Assumptions: Through 2012, IT organizations will spend more money on private cloud computing implementations than external public and private cloud services. Starting in 2014, more spending will shift to public ad private cloud services, as these offerings mature to address business concerns. A hybrid model with internal/external, public/private will dominate.public/private will dominate.

Cloud computing services exist along a spectrum from open public to closed private. With open public services, there are little or no p g g p p p p p plimitations on who can access the service (e.g., a credit card to pay for the service) and the provider owns, operates and controls all details of the implementation. This approach offers the most leverage and greatest flexibility to the consumer, but with significant risk exposure — especially regarding data security and privacy. With a closed private cloud, a single entity owns, operates and controls the cloud for exclusive use of its own captive user community. This makes it easier to address security, privacy, compliance and other risks associated with using externally controlled shared resources, but requires significant upfront and ongoing investment by the private cloud consumer. There is no leverage of external cloud provider expertise, and flexibility is limited to the bounds of the installed infrastructure. During the next three years we will see the delivery of a range of cloud service approaches that fall between these two extremesDuring the next three years, we will see the delivery of a range of cloud service approaches that fall between these two extremes. Vendors will offer packaged private cloud implementations that deliver the vendor's public cloud service technologies (software and/or hardware) and methodologies (i.e., best practices to build and run the service) in a form that can be implemented inside the consumer's enterprise. Many will also offer management services to remotely manage the cloud services implementation. Public cloud providers are also exploring ways to deliver virtual private cloud services. These services look and act like the public services with one key exception — consumers do not share server or storage devices and the services are accessed through a private network connection. Also, consumers are banding together and vendors are delivering community cloud environments to deliver private (i.e., limited/controlled access and resource sharing) cloud services.

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MEX38L_101, 10/11

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It is important to note that in two private cloud approaches (community and virtual private), the consumer is accessing external services that run on the provider's environment. In the other two private cloud approaches (custom private and packaged private), the consumer actually purchases hardware and software and has a completely dedicated implementation.

The Latin American Scenario

Strategic Planning Assumptions: Through 2012, IT organizations will spend more money on private cloud computing implementations than external public and private cloud services. Starting in 2014, more spending will shift to public ad private cloud services, as these offerings mature to address business concerns. A hybrid model with internal/external, public/private will dominate.public/private will dominate.

Cloud computing services exist along a spectrum from open public to closed private. With open public services, there are little or no p g g p p p p p plimitations on who can access the service (e.g., a credit card to pay for the service) and the provider owns, operates and controls all details of the implementation. This approach offers the most leverage and greatest flexibility to the consumer, but with significant risk exposure — especially regarding data security and privacy. With a closed private cloud, a single entity owns, operates and controls the cloud for exclusive use of its own captive user community. This makes it easier to address security, privacy, compliance and other risks associated with using externally controlled shared resources, but requires significant upfront and ongoing investment by the private cloud consumer. There is no leverage of external cloud provider expertise, and flexibility is limited to the bounds of the installed infrastructure. During the next three years we will see the delivery of a range of cloud service approaches that fall between these two extremesDuring the next three years, we will see the delivery of a range of cloud service approaches that fall between these two extremes. Vendors will offer packaged private cloud implementations that deliver the vendor's public cloud service technologies (software and/or hardware) and methodologies (i.e., best practices to build and run the service) in a form that can be implemented inside the consumer's enterprise. Many will also offer management services to remotely manage the cloud services implementation. Public cloud providers are also exploring ways to deliver virtual private cloud services. These services look and act like the public services with one key exception — consumers do not share server or storage devices and the services are accessed through a private network connection. Also, consumers are banding together and vendors are delivering community cloud environments to deliver private (i.e., limited/controlled access and resource sharing) cloud services.

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Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

It is important to note that in two private cloud approaches (community and virtual private), the consumer is accessing external services that run on the provider's environment. In the other two private cloud approaches (custom private and packaged private), the consumer actually purchases hardware and software and has a completely dedicated implementation.

The Latin American Scenario

Strategic Planning Assumptions: Through 2013, 80% of corporations in Latin America will be starting, or involved in, unified communications initiatives. Through year-end 2014, improved JavaScript performance will begin to push HTML5 and the browser as a mainstream enterprise application development environment.

Unified communications and collaboration (UCC) is an ever evolving set of capabilities It's not just integrating IM andUnified communications and collaboration (UCC) is an ever-evolving set of capabilities. It s not just integrating IM and telephony: Collaboration, conferencing and social software are also part of the stack. Because the available solutions and business needs are so diverse, no solution is perfect for all use cases and users. Latin American corporations have started the path toward UCC, strongly driven by mobility.Broadband is strongly pushed in the region by regulatory incentive plans in Latin America. Brazil, Peru and Uruguay have government "social digital inclusion" programs to support broadband infrastructure deployment for access to public institutions. Once the infrastructure is in place, it is up to the local authorities to implement a digital city plan that eventually will bring broadband connectivity to the home. There are also government incentives in place to promote PCs/Internet-enabled devices at reduced rates to the general population.By year-end 2011, more than 1.8 billion people will carry handsets capable of rich, mobile commerce providing a rich environment for the convergence of mobility and the Web. Mobile devices are becoming computers in their own right, with an astounding amount of processing ability and bandwidth. According to our 2Q11 mobile forecasts (see "Forecast: Mobile Services, Worldwide, 2007-2015, 2Q11 Update," G00213717), Latin America is the third largest market in the world with 624 million connections, only after Asia/Pacific with 2.5 billion and EMEA with 902 million.Although Latin America is still small in the number of smartphones and tablets, there is an important awareness and

Page 17

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

g p , pimportance from end users to business applications on these type of devices.

The Latin American Scenario

Definition: Optimization and simulation are using analytical tools and models to maximize business processes and decision effectiveness by examining alternative outcomes and scenarios before, during and after process implementation and execution. Strategic Planning Assumption: Through 2015, pattern-seeking technology will be the fastest-growing intelligence investment among the most successful Global 2000 companiesgrowing intelligence investment among the most successful Global 2000 companies.

We have reached the point in the improvement of performance and costs that we can afford to perform analytics andWe have reached the point in the improvement of performance and costs that we can afford to perform analytics and simulation for each and every action taken in the business. Not only will data center systems be able to do this, but mobile devices will have access to data and enough capability to perform analytics, potentially enabling use of optimization and simulation everywhere and every time.This can be viewed as a third step in supporting operational business decisions. Fixed rules and prepared policies gave way to more informed decisions powered by the right information delivered at the right time, whether through CRM, ERP or other applications. The new step is to provide simulation, prediction, optimization and other analytics, not simply information, to empower even more decision flexibility at the time and place of every business process action.information, to empower even more decision flexibility at the time and place of every business process action.Another way to view this is as a shift in timing. Business intelligence has mainly provided us historical analysis, increasingly powerful ways of analyzing what has already happened. We can increase the scope of the information that is analyzed and we can reduce delays between the data creation and its analysis, but this is a look backward. The new step looks into the future, predicting what can or will happen.We don't want to only spot past patterns of suspicious activity that might indicate fraud had already occurred. Think of the additional value if we could look at an action as it is taking place, predict the results, spot the fraud that will ensue and be able to stop it before it materializes. What if we could predict the likely sales in a store from remaining inventory for

Page 18

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

p p y g yvarious possible purchases at this moment, and offer inducements to a customer to pick the product right now that maximizes likely total revenue for the remainder of the day?Advanced analytics also involves new technologies to search unstructured content and other search enhancements.

The Latin American Scenario

Strategic Planning Assumptions: Through 2014, individual pioneers will introduce 80% of successful social software deployments. By 2016, social technologies will be integrated with most business applications.

Social media can be divided into: (1) Social networking covers social profile management products, such as Myspace, Facebook,( ) g p g p y pLinkedIn and Friendster. It also covers the social networking analysis (SNA) technologies that employ algorithms to understand and utilize human relationships for the discovery of people and expertise. (2) Social collaboration covers technologies, such as wikis, blogs, IM, collaborative office and crowdsourcing. (3) Social publishing includes technologies that assist communities in pooling individual content into a usable and community accessible content repository. YouTube and Flikr are social Web examples. (4) Social feedback is about gaining feedback and opinion from the community on specific items. It includes social rating, socialcommentary, social tagging and social bookmarking. YouTube, Flickr, Digg, Del.icio.us, and Amazon reviews fall into this category.

Consider adding a social dimension to a conventional website or application. As a starting point, analyze how users will interact with th it d fi t i f t d i t t t di l S b i d t i ththe site, define metrics of engagement, and instrument your system accordingly. Survey business processes and categorize them as"structured" or "unstructured." View unstructured processes as prime candidates for deriving business value from social sites and social platforms. Analyze social platforms with regard to their potential for supporting these processes. When building a social site, you are operating in the shadow of social networking giants (Facebook and Google-led OpenSocial consortium). Your long-term strategy must include coexistence or collaboration with these platforms. Define a platform strategy that includes both your relationship to major social platforms. Social applications should have an API to enable open-ended construction of solutions and developers should evaluate emerging standards, such as OpenID or OAuth, and add support where appropriate. In designing social experiences, combine a top-down view of business value, organizational goals and user needs with a bottom-up view of core entities

Page 19

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

(e.g., people, roles and relationships). Resting on this social substrate is the evolving vocabulary of social interactions and gestures. Keep in mind that this is a dynamic space that is just emerging in the enterprise.

The Latin American Scenario

Strategic Planning Assumptions: By 2013, more than half of the Fortune 500 companies will have context-aware computing initiatives. By 2016, one-third of worldwide mobile consumer marketing will be context-awareness-based.

Context-aware computing (CAC) centers on the concept of using information about an end user or object's environment, activities p g ( ) p g jconnections and preferences to improve the quality of interaction with that end user. The end user may be a customer, business partner or employee. A contextually aware system anticipates the user's needs and proactively serves up the most appropriate and customized content, product or service. The term "context-enriched services" describes software that uses information about an end user's environment, community, process and identity to enrich a core function. The cycle of contextual change includes: (1) a change in the user context is initiated by a user action, a state change or a location change, or (2) an event occurring in the "outside world" changes the environmental context based on an action from an application or a change in information or a social network. Examples could be a stock price reaching a threshold or a social network contact initiating contact.g gEnsemble programming is a new development style that extends current mobile, Web and platform techniques. Ensemble programming coordinates the user experiences so that adjacent devices and related services work together to deliver a seamless context-aware user experience. Ensemble programming will emerge as a new discipline in application development by 2013, with some Type A companies exploiting it earlier. Context delivery architecture (CoDA) builds on SOA and EDA, adding formal mechanisms for software elements to discover and apply the context in real time. CoDA provides a framework to define and implement the technology, information and process components that enable services to use context information. CoDA also defines data formats, metadata schemas, interaction anddiscovery protocols programming interfaces and other formalities

Page 20

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

discovery protocols, programming interfaces and other formalities.

The Latin American Scenario

Page 21

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Page 22

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

Page 23

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

The Latin American Scenario

The CIO Survey addresses strategic business issues including: 1) IT budget and portfolios; 2) CIO prioritiesThe CIO Survey addresses strategic business issues, including: 1) IT budget and portfolios; 2) CIO priorities for 2010 and 2013; 3) Enterprise environment and 4) CIO role.

IT Key Metrics Data provides a macro level look at the Gartner Benchmark Analytics global database of comprehensive cost and performance measures. More information on Gartner's Benchmark Analytics solutions

Page 24

Cassio Dreyfuss and Donald Feinberg

MEX38L_101, 10/11

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.