V Winner Post #13- Information Technology

INFORMATION TECHNOLOGY

The Brazilian domestic computer market lags about four to five years behind the European level, mostly because of past years' closed markets. Currently, the total annual Brazilian market for computer hardware, software and services is estimated to be nearly USD 5 billion. Within this market, the corporate software tools sector is growing particularly fast. Between them, São Paulo and Rio de Janeiro concentrate 75% of the buying decisions for information technology in Brazil. It has been estimated that around four percent of all households have personal computers.

Media hype of the Internet is fueling PC purchases. Advances in LAN (Local Area Network) and WAN (Wide Area Network) technology are interacting with the growth in the installed base of PCs. Over the next two years, fledgling corporate experiments in client/server technology will mature into full-blown migration efforts as companies move applications from the mainframe environment to network client/server applications.

Brazilian corporations are investing in custom applications, both to meet the needs of LAN-based departments, and to integrate departments, customers, and suppliers into corporate WANs. The number of installed PCs has passed the threshold where it now makes sense to pay for custom applications to integrate PCs into the corporate network. This integration is increasingly seen as a market-share weapon by Brazilian banking, commerce, and industry. Such WAN-integrating applications will be developed primarily in Brazil, using high-end software tools purchased from abroad. The need for imported tools to develop WAN-integrating software is further heightened by downsizing of corporate mainframes and the outsourcing of the functions of data processing centers.The federal government has started a program, Softex 2000, to develop Brazilian software exports. Softex 2000 aims to start exports by educating Brazilian software developers in how to run companies, pick market niches, package products, and choose distributors. However, it is unlikely that Brazil will achieve anything like India's success at software export, due to Brazil's Portuguese language base, meager investment in mass technical education, and lack of incentives to productivity.

The Software Law of December 1987 permits foreign software to be sold in Brazil as long as it is registered with the Secretariat of Informatics and Automation Policy (SEPIN). The majority of foreign software, submitted for registration with SEPIN has been approved for distribution in the country. This law establishes that registration must be made by the local distributor/licensee, and that the marketing of the software is restricted to a national company. Software distributors successfully argued that the monetary operations tax (IOF) on payments remitted abroad was reduced from 25% to 0%. Another significant obstacle for software distributors in Brazil is the prevalence of copyright infringement which is very common among software market, and a gray market flourishes in hardware business, too.

BEST PROSPECTS

- Add-on tools for third-party RDBMS (relational database management systems).
- Control kits for Visual Basic. Add-ons to Lotus Notes.
- Object-oriented CASE tools and development environments.
- Middle ware for integrating various hardware and software configurations into seamless WANs.
- Software asset control tools and WAN managers.
- 32-bit versions of software tools to run under Windows 95, Windows NT Server, UNIX and OS/2 Warp.
- Client/server application development tools.
- Tools to develop Internet corporate software for information providers, service providers, and firewall implementers.
- Multimedia tools for building Internet content particularly in emerging applications for banking, retail, and publishing/entertainment.

- A. Jonathan Buhalis