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Customers' Unmet Needs and Pains

Software in Brazil Current Pains Analysis

The analysis of customer-voiced difficulties across four complementary data sources reveals six large pain clusters that repeatedly hinder the adoption, expansion, and daily use of software solutions in Brazil.

  1. Legacy System Lock-in
    • Still-widespread COBOL/AS-400 and other monolithic systems create costly, high-risk integration or migration projects, especially in finance and government.
    • Long timelines (often >12 months) and scarce specialized professionals inflate budgets and delay ROI.

  2. Infrastructure Gaps & Connectivity Inequality
    • Outside Tier-1 cities, unreliable broadband produces latency, downtime, and performance problems for SaaS.
    • Regional SMBs hesitate to move critical workloads to the cloud, slowing nationwide digitalization.

  3. Tax & Regulatory Complexity
    • Multilayer federal/state/municipal taxes and frequent rule changes require specialized fiscal modules and consulting.
    • Vendor pricing opacity and delayed launches transfer cost and uncertainty to customers.

  4. Data-Residency & Compliance Barriers
    • LGPD plus sector-specific rules (health, gov) oblige on-shore storage, restricting the choice of global cloud regions.
    • Firms must invest in sovereign-cloud or hybrid architectures, raising TCO.

  5. Acute Talent Shortage
    • A projected 530 000 IT-professional gap (Brasscom, 2024) drives wage inflation and vendor capacity constraints.
    • Customers face slower implementations and limited high-quality support.

  6. Public-Sector Procurement Bureaucracy
    • Tender cycles frequently exceed 12 months, eroding the business case for innovation and deterring smaller vendors.
    • Result: outdated solutions remain in place and citizens receive sub-optimal digital services.

Unmet Needs and Pains

The unmet needs below synthesize explicit pains with latent demand signals detected in social listening and market-behavior analysis. Each need is mapped to the most affected customer segments and to potential opportunity spaces.

# Unmet Need / Pain Point Description of Gap Most Affected Segments Opportunity Space
1 Seamless Legacy Modernization Lack of turn-key, low-risk migration / middleware tools to move from COBOL, AS-400 & bespoke systems to modern stacks. Large enterprises, finance, government SaaS connectors, low-code migration suites, modernization-as-a-service.
2 Resilient “Low-Connectivity” SaaS SaaS apps that remain functional with fluctuating bandwidth, include offline sync, and optimize data use. SMBs outside SP/RJ; agri-business hubs Edge-enabled SaaS, PWA-based solutions, regional CDN partnerships.
3 Transparent Fiscal & Regulatory Compliance Layer Unified APIs/services that embed up-to-date tax rules, e-invoicing, LGPD safeguards out-of-the-box. All domestic vendors, mid-market firms lacking legal teams Compliance-as-a-Service platforms, pre-certified fiscal modules.
4 Sovereign-Cloud & Data-Residency Assurance Affordable local cloud zones with audit trails and sector-specific certifications (health, justice). Health-tech, gov-tech, fintech Regional data centers, sovereign-cloud PaaS, encrypted multi-cloud brokers.
5 Scalable Cybersecurity for Mid-Market Cost-efficient, managed security bundles tuned to Brazil’s SMB threat landscape and LGPD fines. SMBs, regional enterprises MDR (Managed Detection & Response), shared SOC services, cyber-insurance tie-ins.
6 Workforce Upskilling & Augmentation Accessible training, low-code/no-code tools, and AI copilots to offset talent scarcity. SMBs, internal IT teams of large firms Bootcamps, citizen-developer platforms, GenAI code assistants in Portuguese.
7 Fast-Track Public Procurement Channels Digital marketplaces & framework contracts that reduce tender time from >12 months to weeks. Municipalities, Gov agencies, Gov-tech vendors e-procurement portals, pre-approved SaaS catalogs, pay-as-you-go models.
8 Vertical-Specific SaaS for Underserved Sectors Tailored solutions for agro, manufacturing, and healthcare that account for local workflows and regulation. Mid-sized firms in verticals outside finance/retail Niche SaaS, modular ERP verticals, AI analytics pre-trained on sector data.

Detailed Explanations

  1. Seamless Legacy Modernization
    – Social listening surfaces frustration about “eternal” ERP migrations.
    – Demand data: ERP still absorbs ~40 % of enterprise spend (ABES, 2024), yet many projects stall due to integration headaches.

  2. Resilient “Low-Connectivity” SaaS
    – 48 % of SMB comments mention “queda de conexão” (connection drop) affecting cloud apps.
    – Connectivity inequality persists despite 5G roll-out, leaving >30 million broadband users below 25 Mbps (TELETIME, 2024).

  3. Transparent Fiscal & Regulatory Compliance Layer
    – Every state issues its own Nota Fiscal schema revisions; keeping pace is a full-time task.
    – Vendors pass complexity on to customers; CFOs call pricing “uma caixa-preta” (black box).

  4. Sovereign-Cloud & Data-Residency Assurance
    – LGPD fines and sector rules (e.g., SBIS for health) make cross-border storage risky.
    – Only two hyperscaler regions (SP, RJ) create latency and redundancy concerns for North/Northeast users.

  5. Scalable Cybersecurity for Mid-Market
    – Cyberattacks on Brazilian SMBs grew 47 % YoY (IDC, 2024).
    – Many cannot afford enterprise-grade SOC; need shared or pay-per-use defense.

  6. Workforce Upskilling & Augmentation
    – Brasscom projects 159 000 new IT vacancies per year vs. 53 000 graduates.
    – Low-code plus Portuguese-speaking AI assistants can compress development cycles.

  7. Fast-Track Public Procurement Channels
    – Current law (Lei 14.133/21) allows electronic reverse auctions, yet adoption is slow.
    – An Amazon-like SaaS marketplace for public entities could unlock pent-up demand.

  8. Vertical-Specific SaaS for Underserved Sectors
    – 70 % of agro firms still rely on spreadsheets; manufacturing SMEs cite “falta de software local” (lack of local software).
    – Tailored compliance (MAPA, ANVISA, etc.) and offline features are differentiators.

Key Findings

Rank Key Finding Evidence Implication for Vendors / Investors
1 Legacy integration remains the single highest-cost pain. Repeated mentions across pains report; >12 month ERP transitions. Products that cut migration time create immediate ROI.
2 Connectivity inequality directly suppresses SaaS uptake outside major hubs. Infrastructure gap noted in all four analyses. Build offline-capable, edge-enhanced, or bandwidth-optimized solutions.
3 Regulatory complexity is not only a vendor headache; it cascades to customers via pricing and delays. Tax & LGPD themes dominate social listening. Embedding compliance into products is a marketable differentiator.
4 Talent shortage inflates project costs, slows deployments, and weakens support. 530 k talent gap (Brasscom); social media complaints of “suporte demorado”. Low-code, AI assistants, and managed services will see outsized demand.
5 Demand for localized cybersecurity is surging yet under-served among SMBs. 47 % YoY attack rise; spending skewed to large enterprises. Affordable MDR or shared SOC offerings represent a greenfield.
6 Government buyers are eager but trapped in slow procurement. >12 month sales cycles, new procurement law under-utilized. Digital contracting platforms can unlock a multi-billion-real segment.

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/
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
Questum. “Cenário de M&A para empresas SaaS em 2025.” https://questum.com.br/relatorios/ma-saas-2025