AMI-Partners: SMBs in Brazil to Spend US$30B on IT and Telecom This Year.

Telecom services to contribute up to 43% of the total pie, says new AMI study

NEW YORK -- Small and medium businesses (SMBs, or companies with up to 999 employees) in Brazil are on track to spend up to US$30 billion on IT and telecom this year, up some 11% over last year. The bulk (43%) of all IT and telecom spending will be toward telecom, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.

Brazil remains the leading IT and telecom market in Latin America, accounting for approximately half of all dollars spent in the region. Within Brazil, "new business formation and PC acquisitions, plans for opening branches, new hires and increased remote and mobile workers are driving SMBs' usage of communications and networking resources to enhance competitiveness in a global economy," says Maria Carolina Guedes Smith, New York-based Senior Consultant at AMI-Partners. "Brazil's SMBs present a promising and untapped market opportunity for IT vendors, telecom equipment manufacturers, telecom service providers and other technology vendors."

There are roughly 10.6 million SMBs in the Latin America region, with 40% located in Brazil. About 81% of Brazil's MBs (medium businesses, or companies between 100 and 999 employees) and 76% of Brazil's SBs (small businesses, or companies between 1 and 99 employees) are currently using mobile phones. "The usage of mobile devices to access email, calendaring and contact information is on the rise, particularly among MBs," Ms. Guedes Smith says. "Inexpensive mobile technology is a major driver of increased mobile telephony penetration among Brazil SMBs." As such, Brazil's cell phone services market by SMBs is the fourth largest in the world, behind the United States, Japan and Germany. It leads the Latin America region, and accounts for up to 41% of the total cell phone spending by SMBs in the region.

"As real-time communication and data needs increase for SMBs, their need for technologies that enable them to connect with their internal and external world also increase," Ms. Guedes Smith says. "In this scenario, networking environments are the basic infrastructure required to assist SMBs in adopting more advanced solutions such as hosted/premise-based IP communications".

Although the current adoption of IP-based technologies is at an embryonic stage, SMBs in Brazil are gradually becoming aware of the benefits of IP-based communications. This shift toward wireless communications and IP-based networking platforms is spurred by the fixed mobile convergence (FMC) which integrates mobile infrastructure and applications into a fixed IP networking platform. Although technical and regulatory hurdles are being removed, there still remain a variety of business issues that need to be addressed in the SMB space.

Brazilian SMBs also lack internal staff to assist in managing advanced IT operations, particularly among SBs. Controlling costs is another important issue to overcome increased competition. Vendors interested in catering to SMBs in Brazil must do their homework and refine their approach by offering solutions that are designed and packaged specifically for SB and MB needs. Moreover, Brazil's SMB market is highly fragmented, and a successful vendor needs to also understand the preferred channels that SMBs turn to for their IT and telecom needs.

About the Studies

AMI's 2006-2007 Brazil Small Businesses Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 Brazil Medium Businesses Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs across Brazil, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.