Accept: Provider of IT Products for the Brazilian Corporate Market

Interview with Silvio Ferraz de Campos, Director of Accept

What is your assessment of the IT sector in Brazil?

The IT sector in Brazil is an emerging sector that is undergoing many changes and is maturing. Previously the digital and technological market here was based on desktop computers. The Brazilian IT sector has been growing with the presence of international companies and as such, we are now getting the right products for the right uses. The sector is diversifying away from just desktops towards servers, storage and digital security among other areas. The commercial automation sector for example used to be based on desktops but is now being carried out on POS (point of sale) and touch screens, which allow more capacity and features. Therefore overall, the sector is maturing in terms of appliances and hardware so that clients can now find the right products.

I think that we will see excellent growth in some specific IT sectors, particularly in the area of data centres, which are growing enormously as the amount of data collected nowadays by the various appliances on offer such as smartphones, laptop, tablets and desktops increases. All of the information generated by these devices needs to be stored somewhere. To give an example of this, just think of all the digital photos that exist now. All of these devices can take photos and record videos and all of it has to be stored. As a result, this is going to create lots of growth for B-data, which will have to be stored and processed. I think that there will be a lot of growth in this kind of infrastructure for telecommunications and storage. Another area that I think will see good growth is that of digital security. Nowadays more people are using security cameras that accumulate a database that also requires safe storage.

Can you tell us a bit about your company, Accept?

Accept was founded in 1988, thus we have more than 20 years of experience in this market. Our company´s focus is hardware. We produce our own hardware in our technological centre in Ilheús Bahia.

We receive some tax benefits from the government. The PPB is one of the main tax benefits that we receive. Our products are focused on the corporate market. We have three product lines; one line is mini PCs, which are innovated desktop PCs in small chassis that are designed for digital signage and business automation. Another line we have is servers. We work with servers for many things. We offer servers for small and medium companies to use as department servers. We also have mission critical servers for use in data centres and we have storage and internet device servers.

We work with some technology companies like Supermicro, Intel and Microsoft that provide us with some of the technology we use. We import the goods, assemble the products here in Brazil and deliver to our customers. Today we market our company through the resellers, distributors and the solution providers.

One example of a partnership we have in Brazil is our partnership with Unisys, which is an American company that has a branch here in Brazil. We work together to deliver solutions for the government and for large companies.

Today we have partnerships with big companies for internet appliances and POS.

What is the company’s philosophy and what are the main differentials that set you apart?

Our philosophy is partnership. We like to work in partnerships and we honour the partnerships that we have. We work hard to create the right partnership with each company that we work with whether it be a big manufacturer or a small reseller.

The big differential that we have is the tax benefits we receive. The tax system in Brazil is very complicated and is not easy to understand for foreign companies that want to work here. It is nearly impossible for a foreign investor to start and grow a business here if they do not have a partnership with a local business. Our company has a manufacturer with the ISO 9000 quality controls. Thus, we can produce quality products here in Brazil at competitive prices with these tax benefits.

Could you tell us a bit about your partners and client portfolio and perhaps some particular success cases?

We have two kinds of partnerships; one is a technology partnership with our suppliers and the other is a sales partnership with our resellers and solution providers that deliver the final product to the end user. We do not work directly with the end users; our sales are via the resellers and the solution providers.

We have a technology partnership with Supermicro, which is the fourth largest server provider in the world. They provide us with the parts that we then assemble here in Brazil to be sold here with the Supermicro brand. Another big company that we work with is Intel; in fact, this was one of the first Accept partnerships. They provide us with everything we need to build systems here in Brazil.

In terms of sales partnerships, we work with the American company Unisys, which works with us to deliver solutions to big companies and the government. We have some other partnerships with specialised companies that deliver solutions for high performance computing. Such companies include Scherm and Versatus HPC, which are both growing well here. We also have a partnership with a French HPC company. We build these systems and deliver the hardware to the end customer.

One particular success case over the last few years is our work with Unisys on a job we have done for the government regarding the World Cup. Unisys was contracted by the government for a big project to deliver surveillance solutions for the host cities. These solutions are for surveillance systems that will be in these cities but not within the stadiums. They have been working with the government body responsible for such large events. Accept has provided all of the necessary servers. We have provided somewhere in the region of 100 servers that will be able to access the surveillance cameras.

What is the company´s growth strategy?

Our company’s growth is directly related to the partnerships with our resellers. Our responsibility is to find the right technology products and hardware to supply to our resellers with the right software and services so that they can then deliver these products to the end users here in Brazil. We are also working with the small resellers to expand their businesses.

What would you say are the main challenges that your company and the IT sector in Brazil face today?

The main challenges that we face in Brazil today are the politics and the economy! This economy is a difficult one to work in because it depends heavily on the government. The taxes in Brazil are very high; something like a third of a company´s growth goes to the government. There is a lot of bureaucracy to deal with here in Brazil. As I said, the economy depends a lot on the government and this year is particular because it is an election year. This means that the economy is experiencing many ups and downs depending on the outlook of these elections. One thing that needs to be addressed is the dollar exchange rate because this is a big challenge for us. Many of the products that we deal with are based on dollar prices. Sometimes the dollar exchange rate can change by more than 10% in just two weeks.

We are a small company but we compete with large multinational companies like HP, Dell and IBM therefore we have to work in partnerships to be able to survive in this market.

Are you interested in creating any new partnerships and if so, what kind of partnership?

We are closing a deal on a partnership with a local company whereby we are doing a sort of merger with that company. We are growing our business by around 30% per year and this merge should go ahead by the second half of the year. This new partnership will allow us to participate in other cities that we are not currently working in.

We work in partnership with large companies from the United States that are interested in investing and producing here in Brazil. Therefore, we are very much open to working as a partner or as a contract manufacturer for such companies.

What is your vision for the company and the sector over the next 2 or 3 years?

In the twenty-six years that we have been in business, we have had to do many things to make sure the company is well established. I think that in 3 years, we will have more challenges but we are always going to be growing our business. We aim for growth of about 50% over these 3 years. This will not be organic growth because we are planning some mergers.

That is an ambitious goal. What is your vision for the future of the IT sector in Brazil? Do you see any changes happening?

The sector is still growing but so are the challenges! We need to make some changes over these coming 3 years. There are many people interested in working in this market but there is too much competition and the profits are too low. We need to increase volumes and quality to increase the profits.

What would be your advice to any foreign investor that is looking to come and invest in this sector in Brazil?

If an investor is interested in entering the IT sector here in Brazil, I would highly recommend they enter a partnership with a local company here. We have many challenges with bureaucracy and taxes therefore it is necessary to have the support of a local company.

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