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

South America IT Services Market Trends and Insights

Near-shoring Incentives and Digital-Talent Programs in Brazil

Brazil’s federal initiatives generate over 50,000 new IT graduates every year and underpin more than 90 tech parks nationwide. The country ranks fifth in the Kearney Global Services Location Index, thanks to cultural proximity and real-time overlap with U.S. clients. These advantages, coupled with a 500,000-strong developer pool, give Brazil enduring nearshoring appeal even as 5,000-10,000 high-skill vacancies stay unfilled due to northbound brain drain. Regional public-sector funds, including USD 200 million in StartUp Peru and Innovate Peru programs, export the model across neighboring economies while bolstering a workforce of 900,000 developers in the wider LatAm corridor.^{[1]BNamericas, “Banco Itaú planning to migrate 100% of its infrastructure to the cloud by 2028,” bnamericas.com}

Cloud-First Mandates by Top-10 South American Banks

Banco Itaú plans to shift 100% of workloads to cloud platforms by 2028. Banco de Crédito del Perú committed USD 650 million to a Microsoft Azure-based overhaul scheduled for completion in 2026. While under 25% of core applications currently sit in cloud environments, leading institutions expect to lift that ratio above 60% within three years. Legacy-system lock-ins and regulatory scrutiny complicate the transition, sparking demand for specialized migration, security, and compliance services. Workforce-upskilling initiatives and AI-infused banking apps reinforce services pull-through across consulting, integration, and managed security specializations.

Accelerated Cybersecurity Spending after 2023 Breaches

Latin America logs roughly 1,600 cyberattacks every second, with attack frequency running 40% higher than global averages. Chile’s Cybersecurity Framework Law of 2024 created a National Cybersecurity Agency and formalized incident-reporting rules, making Chile an early adopter of region-wide regulation. Average regional breach costs rose 32% between 2022 and 2023, climbing to USD 4.45 million per event. TIVIT opened Latin America’s largest security operations center in São Paulo, reflecting rising managed-security demand, while a 28,000-person skills gap in Chile alone highlights the urgency for talent development.

Hyperscaler CAPEX in Santiago and São Paulo Edge Zones

Amazon earmarked USD 4 billion for a new Chile cloud region that will add three availability zones by 2026. Google pledged USD 850 million for Uruguay’s second hyperscale facility, and ongoing Brazilian projects have already drawn more than USD 4 billion, with São Paulo hosting 80% of national capacity. Combined with Microsoft and Scala Data Centers’ multi-gigawatt roadmaps, these outlays lift total Latin American data-center value from USD 5-6 billion in 2023 to an anticipated USD 8-10 billion by 2029. Higher local compute density multiplies opportunities for edge analytics, hybrid-cloud orchestration, and AI-as-a-service offerings.

Persistent Regional Macro Volatility and FX Risk

Currency instability deters foreign direct investment, with empirical studies confirming negative correlations between exchange-rate volatility and IT-services expansion. Argentina’s devaluation cycles exacerbate wage-pressure and talent-retention challenges, leaving thousands of roles vacant and inflating project timelines. OECD data show South American average tax-to-GDP ratios slipped from 21.5% in 2022 to 21.3% in 2023, reducing public-sector tech budgets.^{[2]OECD, “Estadísticas tributarias en América Latina y el Caribe 2025,” oecd.org}Providers hedge exposures through multi-currency billing, diversified delivery locations, and contingency pricing, yet FX headwinds still shave margins and complicate multi-year contract valuation.

Shortage of Senior Cloud Architects Despite Large STEM Base

Chile alone falls short by 28,000 cybersecurity specialists, and similar deficits exist for cloud architects across Brazil and Colombia. Bloomberg reported 64% of public-sector managers cited analytics and programming shortages as major project risks. Wall Street Journal coverage underscored that Brazilian firms sometimes source Eastern European contractors to handle advanced workloads. While entry-level coders are plentiful, expertise in Kubernetes, DevSecOps, and AI architecture remains scarce, prolonging migrations and constraining provider capacity during peak demand cycles.

Segment Analysis

By Service Type: Cloud Platforms Drive Digital Transformation

Cloud and Platform Services grow at a 9.7% CAGR through 2030, while IT Outsourcing retains a 30.2% share of the South America IT Services market size in 2024. Enterprises accelerating modernization programs move from lift-and-shift steps toward refactoring legacy workloads for multicloud environments. Providers bundle infrastructure, managed security, and FinOps disciplines to meet price-performance targets. Generative-AI pilots dominate 2025 statements of work as Spanish-Portuguese large-language models enhance contact-center automation. Managed Security Services experience double-digit pipeline expansion as ransomware defenses evolved beyond perimeter monitoring. Edge-computing demand rises in retail and telecom, requiring hybrid blueprints that blend on-premises latency management with public-cloud elasticity.

In the out-years, platform revenues exceed professional-services billings as consumption models replace fixed-fee milestones. Microsoft-aligned integrators open practice centers across Bogotá and Santiago to fast-track Azure landing zones. Kyndryl’s Latin American Center of Excellence illustrates the pivot by incumbents to consulting-plus-managed stacks. White-space persists in Spanish-Portuguese conversational AI, encouraging boutique providers to build proprietary corpora. Cloud and Platform Services, therefore, remain the anchor for sustainable expansion across the South America IT Services market.

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

By Enterprise Size: SMEs Accelerate Digital Adoption

Large Enterprises generated 67.2% of 2024 revenue, framing a strategy for global system integrators that pursue multi-tower contracts across cloud, cybersecurity, and data analytics. This cohort demands complex vendor-neutral solutions that comply with stringent data-sovereignty and uptime requirements. They also co-create AI governance frameworks to align with evolving Brazilian and Chilean AI bills. In contrast, Small and Medium Enterprises grow at a 9.1% CAGR to 2030, catalyzed by subscription-priced SaaS, simplified tax regimes, and digital-public-infrastructure rollouts in payments and identification. Providers gain scale by productizing support bundles and automating low-touch onboarding.

Cost-effective marketplace templates for e-commerce, accounting, and HR accelerate SME cloud adoption, narrowing capability gaps with larger peers. Fintech proliferation in Peru and Colombia pushes SMEs toward embedded-finance APIs, further expanding addressable workloads. The shift widens the customer pyramid, allowing mid-tier integrators to build volume around standardized managed-service catalogs. The resulting diffusion of demand safeguards the long-term resilience of the South America IT Services market.

By End-User Vertical: Healthcare Leads Growth Trajectory

Healthcare and Life-Sciences record a 10.5% CAGR through 2030, underpinned by telemedicine infrastructure grants and stricter digital-records compliance. Investments in hospital-edge clouds and AI-assisted diagnostics foster a growing pipeline for HIPAA-grade managed-hosting and integration services. BFSI, while retaining 26.3% share of 2024 spending, advances cloud-native core-bank conversions and open-banking APIs, generating sustained demand for legacy-migration and DevSecOps expertise. Manufacturing adopts Industry 4.0 edge analytics for predictive maintenance, whereas Government agencies pursue citizen-service portals and cybersecurity hardening after high-profile breaches.

Vertical diversification mitigates macro shocks. Retail deploys AI personalization engines to prolong wallet-share, Telecom accelerates 5G platform integration, and Energy utilities adopt IoT for grid balancing. Cross-sector pressure for demonstrable ESG metrics elevates demand for green-IT audits and renewable-power-aligned hosting. The intricate mosaic of vertical use-cases anchors multi-year revenue visibility for providers across the South America IT Services market.

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

Geography Analysis

Brazil owned 54.1% of the South America IT Services market share in 2024, propelled by 500,000 developers and more than USD 6 billion in hyperscaler deployments.

São Paulo alone concentrates 80% of Brazil’s data-center megawattage, giving providers localized low-latency options for multicloud orchestration. Colombia, registering a 9.8% CAGR through 2030, leverages 2024 spectrum concessions to seven licensees, fueling 5G rollout and next-gen service models. Advent International’s purchase of ERP-specialist Siesa affirms investor confidence in Colombia’s digital-economy trajectory.

Brazil sustains its leadership through deep talent pools, pro-investment regulations, and a robust partner ecosystem aligned to hyperscale roadmaps. Corporate cloud outlays, boosted by Banco Itaú’s full migration timetable, keep professional-services pipelines full. Local AI spend is forecast to top USD 2.4 billion in 2025, amplifying demand for data-engineering and model-ops talent. 

Colombia’s double-digit trajectory stems from policy-backed infrastructure upgrades and the clustering of 13% of Latin America’s digital-solution providers in Bogotá and Medellín.^{[3]World Bank, “Digital Economy for Latin America and the Caribbean – Country Diagnostic: Colombia,” worldbank.org} Near-U.S. geography and bilingual talent give it a strategic edge for agile, sprint-based projects. Foreign-capital flows, typified by Advent’s Siesa deal, accelerate the maturity of the partner landscape. 

Argentina faces shorter Planning horizons amid currency swings, yet niche studios continue to excel in gaming, blockchain, and high-performance computing. Chile’s datacenter corridor spanning Santiago to Valparaíso modernizes regional interconnectivity, while its cybersecurity agency orchestrates best-practice frameworks for incident response. Peru’s start-up scene, spearheaded by 154 fintechs, embraces cloud-native architectures, escalating managed-services adoption. Rest-of-South-America markets, including Ecuador, Paraguay, and Uruguay, add incremental volumes through public-sector digitization and small-enterprise SaaS projects. Across the bloc, providers hedge volatility by distributing delivery centers, stabilizing billings, and ensuring service continuity within the South America IT Services market.