Software in Brazil Customer Challenges and Pains Analysis¶

Challenges and Pains faced by Customers¶

Based on the analysis of the provided documents, specifically focusing on the B2B customer segment which is the primary focus, several challenges and pains faced by customers in the Brazilian software value chain can be identified.

A significant pain point for customers, particularly those with established IT infrastructure, is the challenge of Legacy Integration. Many businesses, especially in sectors like finance and the public sector, still operate with older systems (e.g., cobol/AS-400). [Value Chain Analysis], [Software in Brazil Final Customers Identification] Integrating new software solutions with these existing legacy systems is described as complex, time-consuming, and costly, requiring specialized skills and expertise. [Value Chain Analysis] This complexity can lead to delays in project timelines and elevated consulting fees during the implementation phase. [Value Chain Analysis]

Another challenge impacting customers is Infrastructure Gaps, specifically concerning uneven broadband quality outside of major Tier-1 cities. [Value Chain Analysis], [Software in Brazil Final Customers Identification] While cloud adoption is growing, unreliable or slow internet access can result in latency issues for SaaS applications and limit the feasibility of cloud adoption for regional SMBs. [Value Chain Analysis] This directly affects the accessibility and performance of software, creating a pain point for customers located in areas with less developed infrastructure.

Tax & Regulatory Complexity in Brazil also presents difficulties for customers, although it primarily impacts vendors in terms of pricing opacity and the need for specialized fiscal software. [Value Chain Analysis] However, this complexity can indirectly affect customers through convoluted pricing structures and potentially slower go-to-market for new solutions due to the vendor's need to navigate intricate tax rules. [Value Chain Analysis]

For customers in sensitive verticals like health and government, Data-residency clauses are a crucial consideration and potential challenge. [Value Chain Analysis], [Software in Brazil Final Customers Identification] These requirements can limit the options for cross-border cloud deployment, potentially restricting access to a wider range of cloud-based solutions and necessitating investments in local data centers, which could impact cost and flexibility. [Value Chain Analysis]

While not explicitly stated as a customer "pain" in the same vein as technical or infrastructure issues, the Talent Shortage in the IT sector broadly impacts the value chain and can indirectly affect customers. [Value Chain Analysis] The difficulty for vendors to find skilled professionals can lead to delayed projects, potentially impacting implementation timelines and the quality or responsiveness of support services. [Value Chain Analysis]

Finally, Procurement bureaucracy, particularly within the public sector, is identified as a factor that lengthens sales cycles (>12 months). [Value Chain Analysis], [Software in Brazil Final Customers Identification] This extended process can be a pain point for both vendors and public sector customers, delaying access to needed software solutions and reducing the net present value of deals. [Value Chain Analysis]

Priority (Inferred)	Challenge/Pain	Description
High	Legacy Integration	Difficulty and cost of integrating new software with older existing systems (cobol/AS-400).
Medium	Infrastructure Gaps	Uneven broadband quality affecting SaaS performance and cloud adoption outside major cities.
Medium	Tax & Regulatory Complexity	Indirect impact on customers through pricing and vendor go-to-market speed.
Medium	Data-residency clauses	Limitations on cloud deployment options for sensitive data in certain verticals.
Low (Indirect)	Talent Shortage	Can lead to delayed projects and potentially impact support quality/responsiveness.
Medium	Procurement bureaucracy	Lengthy sales cycles, particularly in the public sector, delaying access to solutions.

Correlation with Value Chain¶

The challenges and pains faced by customers in the Brazilian software market are closely correlated with specific steps in the software value chain:

Legacy Integration: This pain point is most acutely felt during the Implementation/Deployment phase. Integrating new software with existing legacy systems is a core activity in this step, and the complexity described directly impacts the effort, cost, and timeline of implementation projects for customers. [Value Chain Analysis]
Infrastructure Gaps: The impact of uneven broadband quality is primarily felt during the Distribution and Implementation/Deployment of cloud-based software (SaaS). Customers in areas with poor infrastructure may experience performance issues or be limited in their ability to adopt SaaS solutions effectively. [Value Chain Analysis]
Tax & Regulatory Complexity: While primarily a vendor challenge, its indirect impact on pricing and go-to-market speed can be felt during the Distribution and Commercial Relationships aspects of the value chain, potentially affecting how easily and at what cost customers can acquire software. [Value Chain Analysis]
Data-residency clauses: These requirements directly influence decisions and capabilities within the Distribution and Implementation/Deployment steps, particularly concerning the use of cloud services. Customers needing to comply with these clauses may face limitations on where their data can be hosted, impacting their choice of software solutions and deployment models. [Value Chain Analysis]
Talent Shortage: This challenge has a broad impact across the value chain, from R&D to Support & Maintenance. For customers, the consequences are most likely experienced in the Implementation/Deployment (due to potential project delays) and Support & Maintenance (affecting the availability and quality of technical support) phases. [Value Chain Analysis]
Procurement bureaucracy: This pain point significantly impacts the commercial interactions and sales cycles, which are part of the Distribution step (specifically direct sales and channel sales to public sector clients) and the overall Commercial Relationships within the value chain. [Value Chain Analysis]

References¶

ABES – Associação Brasileira das Empresas de Software. “Dados do Setor 2024.” https://www.abes.org.br/dados-do-setor
Brasscom. “Empregos e Salários de TIC 2024.” https://www.brasscom.org.br/empregos2024
IDC Latin America. “Brazil IT Market Outlook 2025.” https://www.idc.com/getdoc.jsp?containerId=prLA50276424
TELETIME. “Investimento em TIC no Brasil alcança US$ 90 bi em 2024, alta de 14%.” https://teletime.com.br/31/01/2024/investimento-em-tic-no-brasil/
IT Forum. “IDC prevê 13% de crescimento para o mercado de TI brasileiro em 2025.” https://itforum.com.br/noticias/idc-preve-13-de-crescimento-para-o-mercado-de-ti-brasileiro/
TecnoSpeed Blog. “Panorama da Software House 2025.” https://blog.tecnospeed.com.br/panorama-software-house-2025
Valor Econômico. “TOTVS amplia liderança no ERP latino-americano.” https://valor.globo.com/empresas/noticia/2024/11/05/totvs-resultados.ghtml
Computer Weekly Brazil. “Tendências ‘as a Service’ para 2025.” https://www.computerweekly.com/pt/opinion/tendencias-as-a-service-2025
Agência Brasil. “Indústria de Software cresceu 6,5% em 2021.” https://agenciabrasil.ebc.com.br/economia/noticia/2023-03/industria-de-software
BDMG. “Brasil e Argentina nas Cadeias Globais de Software.” https://www.bdmg.mg.gov.br/pesquisas/cadeia-software
Questum. “Cenário de M&A para empresas SaaS em 2025.” https://questum.com.br/relatorios/ma-saas-2025
Leadster. “8 Estatísticas do Mercado Brasileiro de Software.” https://leadster.com.br/blog/estatisticas-mercado-software
Fenati. “Novas tecnologias podem gerar 800 mil empregos até 2025.” https://fenati.org.br/mercado-ti-empregos-2025
AWS Brazil. “Customer References 2024.” https://aws.amazon.com/pt/solutions/case-studies/brazil/
SAP Labs Latin America. “SAP Labs: 15 anos de inovação no Brasil.” https://news.sap.com/brazil/2023/09/sap-labs-15-anos