South America IT Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

South America IT Market Trends and Insights

Accelerating Digital-Transformation Budgets Post-COVID

South American firms now treat cloud migration, cybersecurity, and automation as board-level imperatives. ECLAC notes that broader internet access can lift regional productivity by 3%–9%. Brazil’s mobile ecosystem added USD 550 billion to GDP in 2024, with GSMA projecting USD 680 billion by 2030[1]. These data points signal a structural, not cyclical, shift in IT budgets. Enterprise demand stretches from secure remote-work enablement to AI-driven supply-chain visibility, locking in multi-year spending commitments. 

Cloud-First Strategies Among Mid-Market Enterprises

The mid-market pivot toward cloud platforms continues to accelerate. CSIS estimated regional cloud spending at USD 10.9 billion in 2021, led by Brazil at USD 4.2 billion. Microsoft’s first hyperscale region exemplifies provider commitment, shaving latency while satisfying data-residency rules. Regulatory frameworks such as Brazil’s LGPD further motivate companies to adopt modern, compliance-ready architectures. 

Fintech and Retail-Media Boom Boosting SaaS Uptake

Brazil’s PIX system achieved 95% consumer adoption within four years, creating a vast transaction dataset for SaaS vendors. Plug and Play recorded 1,500 Brazilian fintechs in 2024, up 47% year over year. The same payment rails power retail-media networks, which depend on real-time analytics and ad-tech integrations to monetize first-party data. SaaS providers focusing on fraud prevention, customer intelligence, and omnichannel orchestration are capturing this spend. 

Hyperscalers’ Data-Center CAPEX Wave

Amazon earmarked USD 4 billion for Chilean cloud zones, the largest tech investment in the nation’s history. Google is building a USD 850 million facility in Uruguay to anchor its Southern Cone footprint. Renewables account for over 80% of Brazil’s grid mix, giving hyperscalers carbon-neutral capacity for compute-intensive AI workloads. New submarine cables linking Fortaleza, Punta Arenas, and Valparaíso reduce latency and place the South America IT market on global routing maps. 

Persistent IT-Skills Shortage and Wage Inflation

South America produces 20,000 new engineers annually, far below demand. Firms still scramble for AI, cybersecurity, and cloud architects. Terminal reports that 87% of developers consider compensation the primary job factor. Scarcity lengthens project timelines and lifts salary baselines, curbing the pace at which the South America IT industry can deliver transformation. 

Power-Grid and Fiber-Backbone Bottlenecks Outside Tier-1 Cities

Reliable power remains uneven. Secondary Mexican cities face lengthy interconnection queues, while Brazil leverages surplus hydro and wind capacity. Patchy terrestrial fiber forces some enterprises to keep workloads on-premises. These infrastructure gaps slow market penetration for cloud platforms, even as the South America IT market continues to diversify geographically. 

Segment Analysis

By Product Type: Services Momentum Outpaces Software Scale

The services segment of the South America IT market is projected to grow at an 8.7% CAGR, eclipsing hardware and even the dominant software category over the forecast window. Software still controlled 55.6% revenue share in 2024, underscoring its core role in digital strategies. Enterprises increasingly bundle managed services with licenses, driving demand for consultative migration, AI model training, and ongoing optimization. VARs and system integrators are repositioning toward outcome-based contracts that fuse proprietary IP with vendor ecosystems. As a result, the South America IT market size attributable to services is expected to surpass USD 150 billion by 2030. 

The hardware slice continues to post steady but muted gains, reflecting a transition from capital-heavy server rooms to asset-light cloud OPEX. Vendors are pivoting toward edge appliances, HCI systems, and AI accelerators to stay relevant. Meanwhile, the convergence of DevSecOps tooling and managed detection-and-response services illustrates how software and services are becoming inseparable buying motions in the South America IT market. 

Note: Segment shares of all individual segments available upon report purchase

By Deployment Model: Cloud Adoption Rises Within a Hybrid Reality

On-premise deployments retained 68.5% of the South America IT market share in 2024, an outgrowth of existing assets and compliance concerns. Yet cloud workloads exhibit a 9.3% CAGR to 2030, signaling sustained momentum. Brazil’s proposed renewable-energy tax credits for local data centers are catalyzing hyperscaler builds that keep data resident while meeting ESG targets. As CIOs balance sovereignty, latency, and cost, hybrid architectures dominate roadmaps. 

Multi-cloud tooling, automated FinOps, and secure connectivity platforms are in high demand as enterprises orchestrate workloads across AWS, Azure, Google Cloud, and regional players. For most organizations, the question is not whether to migrate but which workloads to migrate first. Consequently, the South America IT market size tied to cloud-delivered services is forecast to breach USD 200 billion by 2030, while on-premise refresh cycles concentrate on mission-critical and edge-computing use cases. 

By Enterprise Size: SME Acceleration Erodes Large-Enterprise Monopoly

Large enterprises generated 72.5% of 2024 revenue, asserting budgetary dominance. Nonetheless, SMEs are growing at a 9.0% CAGR, narrowing the gap through cloud subscriptions and platform as a service (PaaS). PIX and open-banking regulations compel even micro-retailers to incorporate secure digital payments^{[2]Bank for International Settlements, “Fast Payments and Open Banking in Brazil,” bis.org}. SaaS billing models eliminate upfront costs, letting SMEs access ERP, CRM, and AI tooling once reserved for Fortune 500 peers. 

Vendor go-to-market strategies now target partner channels, fintech integrations, and self-service marketplaces to capture the expanding SME wallet. Focus on low-code/no-code and template-driven analytics accelerates time to value for smaller teams. As the decade ends, SMEs are expected to command over one-third of the South America IT market, reinforcing the democratization narrative. 

Note: Segment shares of all individual segments available upon report purchase

By End-User Industry: Retail and E-Commerce Narrow the Gap With IT and Telecom

IT and telecom led 2024 spending with 31.5%, propelled by 5G rollouts, fiber backhaul, and telco cloud initiatives. However, retail and e-commerce are advancing at an 8.2% CAGR—double the pace of several traditional verticals. MercadoLibre alone announced USD 13.2 billion in 2025 capex to scale logistics, payments, and AI-driven advertising. Retailers seek unified inventory views, hyper-personalized marketing, and fraud-free checkouts, fueling SaaS demand. 

Financial services, manufacturing, and energy sectors continue steady digitization. Cross-industry convergence is evident as retailers launch fintech arms and telcos monetize data via advertising platforms. This interlacing of verticals expands addressable demand for horizontal cloud services, reinforcing the resiliency of the South America IT market. 

Geography Analysis

Brazil anchors the South America IT market with 35.4% revenue share, backed by 80% renewable energy penetration and a submarine-cable-rich coastline. São Paulo functions as the primary interconnection node for hyperscalers and content-delivery networks, lowering latency for domestic users. The General Data Protection Law (LGPD) has become a de facto standard for foreign investors, ensuring predictable compliance regimes. PIX’s 95% consumer adoption exemplifies Brazil’s capacity to scale digital innovations rapidly. These conditions justify the government’s USD 350 billion data-center roadmap, which further cements Brazil’s infrastructural edge through 2030. 

Argentina is the fastest-growing geography with an 8.5% CAGR. The Large Investment Incentive Regime (RIGI) offers 25% corporate tax and 30-year stability for tech investments above USD 200 million, providing legal clarity uncommon in the region^{[3]Gobierno de la República Argentina, “Ley de Incentivo a Grandes Inversiones (RIGI),” argentina.gob.ar}. Coupled with energy prices as low as USD 0.03 per kWh and skilled STEM talent, Argentina attracts both hyperscaler data halls and nearshoring software labs. The anticipated expansion of fiber routes between Buenos Aires and Santiago further integrates the country into regional traffic grids. 

Colombia, and Chile round out the core markets. Colombia benefits from 18 free-trade accords and a 150,000-strong tech workforce, positioning Bogotá and Medellín as bilingual service hubs. Chile’s solar-rich Atacama region supplies cost-efficient green power for data centers, while coastal Valparaíso hosts new trans-Pacific cable landings. Together, these countries diversify demand and reduce the single-market concentration risk for investors in the South America IT market.