IT Outsourcing in Brazil: A Complete Overview
IT outsourcing is a growing trend due to its flexibility and the opportunity to attract top talent for project work. It allows companies to streamline their hiring process and achieve cost-effective results. But the question remains: how do you practically select the country from which to hire your workers?
The answer is simple: Brazil is one of the options for IT outsourcing that enables businesses to find dedicated developers for their projects. Since 2009, Brazil has been steadily developing its IT market, producing skilled and talented developers. Companies such as IBM, Google, and Amazon have established offices there. Let’s review a few compelling reasons for companies to choose outsourced workers from Brazil:
- Convenient time zone
- Cost savings
- Well-developed IT infrastructure, and more
However, there are still unanswered questions, such as the challenges and opportunities associated with IT outsourcing in Brazil. What about government support for the IT industry, as well as business opportunities and challenges? Let’s explore all of these aspects in today’s article.
State of the IT Industry in Brazil: trends, challenges, and opportunities
According to the GDP report, Brazil ranks seventh among the countries with the largest economies. The IT outsourcing segment in Brazil is expected to reach $8.54 billion in 2023. As of 2021, Brazil’s IT market was valued at $45.7 billion, and it has been evolving over the years, offering a well-established talent pool for IT outsourcing.
The emerging trends in the Brazilian IT industry are driven by advancements in technology. Companies in Brazil are increasingly investing in areas such as IoT (Internet of Things), data, cloud solutions, AI, and blockchain, as highlighted in the IDS report. Cybersecurity and the maturity of cloud computing are among the main trends in the IT sector.
However, there are challenges to overcome, such as the need for more skilled tech workers, which can be addressed through educational programs. Other challenges include cybersecurity, bureaucracy, and difficulties in building robust IT infrastructures. Nonetheless, these challenges also present opportunities for digital transformation, innovation implementation, government support programs, and more.
Overview of Major IT Companies in Brazil and Their Areas of Specialization
The IT market in Brazil is renowned for its thriving industry, with numerous companies offering innovative services and solutions. Let’s take a look at some of the leading IT companies in Brazil and their areas of specialization.
It’s one of the largest global IT companies presented in Brazil, which provides services in different areas, such as:
- supply chains, logistics, and transports,
- information technology,
- hospitality & leisure,
- business services.
They strongly focus on providing various options to cover multiple business needs.
TOTVS is a Brazilian IT company that specializes in providing solutions for enterprises and middle-sized companies. They offer integrations for complex ERP systems, Smart Analytics for business intelligence, HR solutions, and consulting. Their company management systems enable clients to scale their businesses and automate most processes.
With over 35 years of experience, Stefanini is a private service company that offers a comprehensive range of services to cater to various business requirements. They provide software development, analytics, automation, cloud, AI solutions, and more.
In summary, many Brazilian IT companies cover all aspects of software development and focus on innovation to bring new digital solutions, contributing to the growth of the IT market in Brazil.
Brazilian B2B IT Services Market
The B2B IT services market in Brazil is well-represented in the country and continues to grow steadily. With the advancement of technologies such as AI, cloud-based solutions, big data analytics, and machine learning, the market is poised for further development.
Geography of Exports: Brazil’s IT market is primarily focused on Latin America, with the country’s largest economy expanding its services to countries such as Argentina, Mexico, Chile, and Europe.
Types of Companies and Salaries: The market includes a diverse range of companies, from startups to large enterprises. Salaries for IT employees vary depending on their level of expertise, with the average monthly salary for an IT employee being around $1640.
Tax System and Associations: The Brazilian software association, ABES, represents over 2,000 companies and accounts for 85% of the software development turnover in Brazil as of 2022. However, the tax system in Brazil can be complex, with multiple types of taxes, including federal, state, municipal, and social security contributions.
Key Cities: São Paulo is currently Brazil’s most significant innovation hub, with numerous companies of varying sizes. Other prominent cities in the IT industry include Rio de Janeiro and Belo Horizonte.
The advantages of working with Brazilian IT companies
Brazil boasts a vast pool of talented and skilled IT workers, with over 475,000 developers, making its IT market a significant part of the economy. Here are three main reasons why hiring an IT company from Brazil can benefit your business:
- Cost Efficiency: Hiring an IT company from Brazil can be cost-effective, especially for startups with limited budgets. According to Glassdoor, the average payment for IT professionals in Brazil is comparatively lower than in other countries.
- Large IT Market: Brazil’s IT market is expected to grow by 5% in 2023, as per the IDC Brazil report. The country remains a hub for the software development market, making it easier to find a suitable IT team for your business.
- Convenient Time Zone: Brazil’s time zone allows for convenient communication with developers in real time, depending on your location. This can facilitate team setup and streamline reporting and information-sharing processes, even if you are located in different countries.
IT outsourcing in Brazil can be an outstanding option for businesses looking for cost-effective and future-proof development services.
Government Support for the IT Industry in Brazil: tax incentives and funding programs
Working with IT companies in Brazil comes with unique advantages, including government support and a growing IT market. For instance, the Brazilian government offers tax incentives through the “Informatics Law,” which allows businesses to reduce taxes in exchange for investments in the country’s research and development market.
Furthermore, FINEP, a leading funding program for promoting Brazil’s economy, including the IT sector, offers grants to companies to foster innovation and business improvement.
In return for these tax reliefs, companies are committed to investing in the development of Brazil’s economy. This collaborative approach accelerates the growth of the IT industry, while remaining flexible and open to innovations.
Future Outlook for the IT Industry in Brazil
The IT industry in Brazil is experiencing rapid growth and shows no signs of slowing down. Companies are investing in new developments, supported by funding programs, while government initiatives continue to drive the growth of the IT sector, enabling better services for clients worldwide. Let’s take a look at the statistics:
- The IT outsourcing market in Brazil is predicted to grow by up to 10.25% from 2023 to 2027.
- Enterprise revenue is expected to reach $99.4 billion by 2026.
- Brazil boasts over 500,000 developers, and this number continues to grow.
The IT industry in Brazil is at the forefront of innovations, such as cybersecurity, AI, ML, and cloud solutions. Companies of all sizes can easily hire specialists or entire IT teams to implement any digital business idea without hassle.
How Red Jumpers can help clients achieve IT goals?
Red Jumpers is an agency that brings together talented developers and companies. With over five years of experience in the IT outsourcing market and 250+ signed contracts, we offer the following benefits:
- Access to a pool of 7,000+ skilled developers.
- Delegation of the complex hiring process, allowing you to focus on your core business.
- Provision of a strong and ready-to-work IT team or individual developer.
- Ability to realize any digital solution for your business needs, even with rare programming languages.
Ready to hire dedicated developers for your project? Simply fill out the contact form on our website, and we will help you form your ideal IT dream team.
Hiring an IT developer can be challenging, and the success of your project depends on the team that works on it. Brazil IT outsourcing is an excellent option for companies seeking skilled coders and cost-effective project solutions.
If you need further clarification about your idea, don’t hesitate to reach out to us using the form. We are here to provide solutions for all your business needs.
April 19, 2023