IBM and Totvs enter into international agreement
Valor Econômico
IBM and Totvs, largest Brazilian software company, signed yesterday a global partnership for the supply of Enterprise Resource Planning systems (ERP), focused on small and medium-sized enterprises. This is the first agreement IBM closes to offer management software in the "clouds". Under the model, the program does not have to be installed in the user's computer and it can be remotely accessed from data centers. Instead of buying a user license, the customer pays for the program in the service format, such as an electricity bill. The alliance should help increase the market share of the American company in the market of ERP systems. To Totvs, the agreement should speed up the internationalization process started in 1997. As of January, IBM will distribute the ERP systems of Totvs in the foreign market. The first countries chosen are Argentina, Chile and Colombia.
According to data of the IDC consulting, the ERP market in the emerging countries generates nearly US$ 1.8 billion a year, and it is expected to grow 9.4% a year until 2013. Worldwide, the segment generates nearly US$ 24 billion a year. A report of the Gartner institute indicated that in 2008, the global market was led by SAP, with 40% of market share. Totvs ranked 7th, with 2% of the total. The Brazilian company leads the ERP market in Brazil, with 49.1% of market share, and 31.2% in Latin America. IBM ranked 13th in 2008, with 1.2% of market share.
The agreement foresees that Totvs will offer its 26.2 thousand customers the analytical systems of IBM. Also called "business analytics", those programs track and analyze data in real-time by means of mathematical and statistical models, and generate tendency information from the analyzed data. To Totvs, the partnership will allow accelerating its internationalization process, said company President, Laércio Cosentino. Totvs started its effort 13 years ago and it is currently present in 23 countries. The earnings from abroad are still low, though: it corresponds to something between 5% and 8% of the earnings that, in the accumulated from January to September amounted to R$ 833.7 million (US$ 490.4 million).
To start the operation, both the companies have invested in the hiring and training of staff, whose value is kept confidential. The data center that will concentrate the basis for the provision of the services in the cloud will be that of IBM, located at Hortolândia (SP). The alliance has been negotiated by the companies for nearly a year. The companies already had partnerships in the area of storage of data for 20 years.