Although the technology industry is one of the least affected in the context of the pandemic, a process of mergers is anticipated.
A time of mergers and acquisitions in the software and IT industry is coming, because the recession left by the pandemic will be so deep that not all companies in the sector will be able to withstand the fall.
The effect will be felt mainly in local payment chains, and that will make many companies unable to withstand the onslaught. The pandemic found the market for software and computer services with a high atomization of suppliers with less than 200 employees, meaning that, as they are small companies the impact of the coronavirus is bigger, according to data from the Chamber of Software and Computer Services Companies (CESSI).
”We believe that the pandemic will generate a period of mergers and consolidation of players within the sector at a regional level. The payment chain is damaged and that is why the companies that are better organized will resist.Adrián AnacletoCEO of Epidata
Based on data from CESSI, the executive said companies expect to have losses of about 7% in 2020 compared to the dollar amount billed in 2019, when the sector already suffered a contraction in revenue compared to 2018.
Even so, the expectation for this 2020 is that the level of demand for professionals, estimated at about 5,000 specialists, will be maintained.
”In the midst of the pandemic, we have incorporated 60 new professionals and we still have another 60 vacancies open, only in Argentina.Adrián AnacletoCEO of Epidata
The executive said that locally one of the places where the demand for technical professionals is growing is in Mendoza, where the talent emerging from the universities is very well trained but is not enough to satisfy the growing need of the companies installed there based on the plans aimed at boosting this industry.
Despite the context, Epidata has accumulated good results in the first quarter of 2020, when we added new clients and projects focused on innovation and software development. “Despite the fact that all Latin American currencies suffered devaluations, the IT sector continued to grow, more so if we consider employment as a variable to measure market evolution,” he expanded.
In 2019, the company had a turnover of US$8.7 million, 20% more in constant currency than in 2018. The good performance is due to the fact that 30% of the company’s revenues come from US-based clients such as Salesforce, Stanford Research Institute (SRI) and J.P.Morgan, while Latin America accounts for 70% of the turnover, of which Argentina is responsible for 50%.