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Much was said and published in 2009 about Brazil finally proving it has finally gotten its’ act together. The final test was the actual worldwide financial crisis, which it was able to weather it quite well. Going forward, the challenge is to keep the momentum. The economy continues to thrive and with interest rates finally reaching one digit, the lowest money cost in the history of the country. According to the economic consultants, a 2 point percentage drop in actual interest rates means an additional incentive up to 1.5 percentage points for the gross domestic product. With actual interest rates reduced to 5 %, as expected this year, the growing potential of the Brazilian economy raises from 4 % to at least 5, 5% a year.

According to Arminio Fraga, former Chairman of the Brazilian Central Bank, the current interest rates are the result of long-term efforts to control inflation and public debt. However, he also believes that there is no assurance that they will always remain low. He mentions that lax controls may jeopardize everything and that important structural reforms are still necessary to bring down the size of the State.

Regardless, however, with the end of substantial interest gains, companies, banks and also the government will have to seek more productivity. It will be necessary to balance the drop in interest rates with an increase in operations output. This is where a new mentality is needed. This is where it is believed where lies the greatest chance for Brazil to consolidate as one of the new Super Powers. It is not by chance that is seen as a compounding effect for Brazil, the winning of the hosting of the two largest world sporting events: The FIFA Football World Cup in 2014 and the Summer Olympic Games in 2016.

The drop in interest rates is very meaningful to several sectors that have been affected in the past. The most obvious one is the stock market. In this new context, investment funds and pension funds should more than double the investments in the stock market, which could reach US %$ 160 billion by 2013. This amount does not take into account investments from foreign companies or what 500 000 new investors might invest. The number of individual investors will double the stock market and all this appetite will boost debentures and secure bonds.

The new economic dynamics will not only help revive investments in infrastructure, but above all it means that instead of going abroad to obtain cheaper money and longer term loans, now local companies can just go around the in country corner. Now companies will be able to become competitive in the global scenario by having the same investment capability, which in turn releases the power for innovation and creation of competitive advantages. Companies will be able to entertain consolidation strategies and by that create more Brazilian multinationals.

Creating bigger companies in the information technology sector is considered one of the greatest strategic challenges for the Brazilian IT industry, which is very dynamic, but also very fragmented. Now is the time to take advantage of all the converging positive elements. It is an opportunity that can’t be afforded to lose.

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The Brazilian Information Technology market received a new boost last Monday afternoon (12/07). To strengthen the industry and speed up the process of international expansion for Brazilian companies, government representatives, associations, executives, opinion formers and journalists gathered at the Renaissance hotel, in São Paulo, for the launch of a new brand representing the sector: “Brasil IT+” (read as Brazil IT “plus”). “Brazil is going through a magical moment and the new brand will help us gain a bigger presence on the international market,” said Antonio Gil, president of Brasscom. “Now we need to be even better prepared for the challenges.”

Brasil IT+ is an evolution of the brand Brazil IT and is built on four pillars: its Brazilian origin; the size of the sector and the country; the building of great partnerships; and its capacity to be a strategic player in IT. “These four attributes together represent Brazil and show our capacity for innovation and our potential on the global market,” said Alessandro Teixeira, president of Apex-Brasil?.

The launch of this new concept was the first step for the sector towards expanding its presence on the international market. A group of 13 institutions including associations from the sector (Abes, Anprotec, Assespro, Brasscom, Fenainfo, Softex, Sucesu) and governmental bodies (ABDI, BNDES, Apex-Brasil?, MCT, MDIC and MRE) will manage the new brand and create the strategies that will support it abroad, showcasing Brazil’s IT competencies and qualities, delivering secure and efficient solutions. “This is one of the best opportunities we have to position Brazil on the international market as a global powerhouse in IT,” said the Minister for Development, Industry and Foreign Trade, Miguel Jorge. “We can certainly think about a more promising future for Brazil’s IT industry,” added Julio Raimundo, Head of the Industrial Areas at BNDES, the Brazilian Development Bank.

FORT LAUDERDALE, Fla. – December 4, 2009 – Stefanini IT Solutions (www.stefanini.com), a global provider of IT consulting, systems integration, and outsourcing services, announced today that the company was ranked as the number one Latin American outsourcing vendor in the recently released Black Book of Outsourcing report. This top Black Book ranking reinforces Stefanini’s continued growth and its commitment to providing high quality services to clients in the U.S. and other regions worldwide.

The Black Book of Outsourcing, part of the Datamonitor Group, is a widely-recognized annual survey compiled by the Brown-Wilson? Group that evaluates the costs and benefits of outsourcing. The Black Book produces a yearly ranking of outsourcing companies based on survey responses from more than 26,000 executives worldwide.

Stefanini, the largest Brazilian IT services company, with its U.S. headquarters in Fort Lauderdale, earned the top ranking in the annual user survey after evaluation of 31 leadership and management criteria and 18 key performance indicators based on client experience, including training, breadth of offerings, scalability, flexible pricing and reliability. More than 600 current Latin American clients participated in the 2009 client experience poll.

“The top ranking in the Black Book of Outsourcing report validates the quality of the services that Stefanini has been providing to clients in Latin America as well as in the U.S., through our Nearshore Delivery Centers,” said Antonio Moreira, Stefanini’s CEO of North America. “The report also raises Latin America’s profile as a top destination for U.S. companies that are looking for alternatives to reduce costs or are exploring viable options beyond Asia.”

The 2009 Black Book of Outsourcing also included data on the growing popularity of Latin America as a destination for IT outsourcing for the North American market, citing the favorable time zone, variety of language skills, qualified workforce, free trade agreements with the U.S., and flexible labor laws. The survey found that U.S. companies are among the most satisfied with outsourcing to Latin America.

“Latin America is increasingly becoming a top spot for IT outsourcing and as the Black Book survey demonstrates, Stefanini IT Solutions is the leader in delivering reliable, scalable and cost-efficient outsourcing solutions,” said Scott Wilson, partner, Brown-Wilson? Group and co-author of the Black Book of Outsourcing guide.

''About Stefanini
Stefanini IT Solutions is a global provider of onshore and nearshore IT consulting, systems integration and outsourcing services. The company has more than 8,500 employees with 36 offices in 16 countries, and more than 350 active customers across a broad spectrum of markets, including energy and utilities, insurance, manufacturing and distribution, oil and gas, financial services, and telecom. One of Brazil’s leading IT companies, Stefanini IT Solutions is CMMI Level 5 and ISO 9001:2000 certified. Founded in 1987, Stefanini IT Solutions currently has operations worldwide, including North American headquarters in Fort Lauderdale and offices in Atlanta, Chicago, New York, and Montreal.''

For the sixth year, Brazil IT, the Brazilian IT services technology initiative supported by SOFTEX (Society for the Promotion of Excellence in Brazilian Software) and APEX-Brasil (Brazilian Export and Investments Promotion Agency) is sponsoring the Gartner Symposium / ITXpo event.
“Brazil was not an IT destination because our internal consumption was too big. With the acquired business expertise and the commitment on getting the job done, Brazilian companies are conquering the world”, states Robert Janssen from Outsource Brazil (www.outsourcebrazil.com.br)
Brazil IT has also created a new market niche inside Gartner events: the Country Pavilion. Brazil IT initiative proved so successful that other countries followed suit. When Brazil IT started at the ITxpo Fall 2004, IT exports from Brazil reached a little more than 300 million dollars. Today Brazil is the eighth largest IT market in the world, and IT exports are bound to achieve 3.5 billion in 2010. As Glaucia Chiliatto from Softex said, “The Gartner Symposyum ITxpo is a great event to sponsor. It has all the high level buyers’ decision makers together with the analysts, the de facto opinion makers in IT”.
In these 6 years Brazil IT has brought to Orlando almost 50 different companies. For 2009, eleven were selected:
www.stefanini.com
Stefanini IT Solutions is a global provider of onshore and nearshore IT Consulting, Systems Integration, and Outsourcing services. The company has over 8,000 employees with 36 offices in 16 countries, and over 350 active clients. With 12 Development Centers in Latin America, Stefanini is the largest Brazilian native IT consulting company and one of the largest on the continent.
CPM Braxis
www.cpmbraxis.com
The largest Brazilian IT services provider with over 5,500 highly trained professionals and a 27 year track record with highly complex projects. Focused on delivering the highest quality, we are ITIL compliant, ISO 2000 and CMMi 5 certified. We offer Application Development and Maintenance, Infrastructure Management, BPO and Enterprise Solutions to leading companies.
Actminds
www.actminds.com
Actminds has been successfully applying its Agile methodology to Companies in the US, utilizing Nearshore development for Web Applications. Using several cost-effective technology platforms and Scrum methodologies, we've provided proven high value and on-time performance to our Client. Actminds has also done Test Driven Development projects, reducing development timeframes
Politec
www.politec.com

Politec is a multinational of Brazilian origin and one of the largest IT services providers in Brazil. Throughout its almost 40 years of existence, Politec has constantly increased its international market share. Today, Politec has offices in Japan, the United States, Brazil, Argentina and Chile, in addition to production clients in several other regions across Europe/Middle East/Africa. Such footprint, combined with Politec’s excellence, has made it an example of a company committed to offering innovative, flexible and customized solutions in technology, outsourcing and consulting.

CINq
www.cinq.com.br
Commitment, Innovation and Quality, with these words you spell Cinq Technologies, a company specialized in software development projects and IT solutions design for major technology suppliers and corporations.
Cinq offers a broad range of services including:
• Consulting, Design, Research & development
• Nearshore/Offshore Outsourcing
• Certified Software Factory
• Staff Augmentation
• Technical Support`
• Software development for mission critical solutions
Apdata
www.apdata.com.br
Apdata is a Software House / eService Supplier with 24 year’s experience in Payroll, HCM and Outsourcing. One of fastest growing companies in the last 2 years, Apdata is now entering the U.S. market.
Ecore
www.ecoreinternational.com
e-Core offers high quality Staffing and Application Development Solutions from New York (est. 2006) and Brazil (est. 1999). A successful track record with US customers (since 2004) along with competitive prices, overlapping business hours, technical expertise and high retention rates provide great value for your IT Services needs.
SETRION
www.setrion.com.br
Setrion Software is a Brazilian company focused on solutions to the IT services management that increases productivity and safety with a pro-active management of the IT infra-structure. Some of our specialties are software metering tool, hardware & software inventory tool, USB control, instant messenger control and help desk solution.
Ilion
www.ilion.com.br
ILION is a technology company specialized in developing software applications for the Internet, optimizing corporate communication.
These software applications allow an agile and practical management of the information common to the company's activity, aimed at providing a more effective communication among companies and their clients, sales channels, suppliers and the marketplace. Hence, a true relationship channel between collaborators is established.
Ilegra
www.ilegra.com.br
ilegra provides software development, software testing and infrastructure services, working with several technologies, such as Oracle, SAP, Java, Microsoft and others.
ZENTHI
www.zenthi.com.br
A company for nearly 10 years working in the ERP market, with stable solutions in several areas, modern technology and easy to learn.
So is the Zenthi Technology, a manufacturer of customized software, ERP products, and database consulting provider.

ABOUT SOFTEX (www.softex.br) - Society for the Promotion of Excellence in Brazilian Software - SOFTEX - is a non-profit organization that promotes the Brazilian software and related services industry's competitiveness. SOFTEX has more than 1,300 members.

ABOUT APEX-BRASIL (www.apex.org.br) The Brazilian Export and Investments Promotion Agency - APEX - is a government agency focused on promoting Brazilian products and the country image.

It has taken a while, but it has finally happened. After waiting for a little over a year we can now celebrate partial company tax exemption on payroll, to encourage exports of information technology software and services. On August 20th Brazil's President signed Decree 6.945, which regulates Law 11.774, of September 2008, which reduces the welfare tax rate on payrolls for companies that export from 20% to 10%. Valid for five years as of September, the benefit will require, in return, that the companies invest in training, research, development and technological innovation.

This is a victory for Brasscom and the other associations in the software sector who have gotten the measure included in the Brazilian Government's Productive Development Policy (PDP), launched in May 2008. The decree comes at a good time and signals the importance of the sector to Brazil's development at moment in which the country is gaining a profile and international interest is growing among potential investors in the country.

The decree will allow Brazilian companies in the sector to get more vigorously involved in the global competition for IT service outsourcing contracts. Analysis service providers, systems and games developers, programmers, data processors and even call centers will benefit from the tax reduction. Added to this new benefit is another one, which is already in play. Sanctioned by the President of Brazil in March this year, Law Nº 11.908 authorizes Information and Communication Technology companies to discount from their income tax twice the amount they spend on training people in software development.

With the eighth largest IT market in the world, Brazil needed an incentive to position itself on the global scenario and the President's approval is an important boost to Brazil's competitiveness. The incentive produces real gains in competitiveness for exports, an area in which labor costs could come down from a current average of 70% to 80% of companies' turnover to 60%. The reduction of taxes could be worth around US$ 70 million by the end of 2009. The government's immediate loss of welfare tax will be recouped in the medium term in greater collection of income tax.

We believe that this is a vitally important step which will be complemented by others that will expand the capacity of private initiative to operate with greater effectiveness on the global scenario. We are sure that in this way we are closer to our government-agreed target of achieving US$ 3.5 billion in exports by 2010.

Softex with the support of APEX, is sponsoring for the 6th time the Brazil IT initiative at the Gartner ITXpo 2009. The event will take Place at the Dolphin Hotel in Orlando, FL from 18th to 22th of October.

As a premier sponsor, the Brazil IT pavilion is an opportunity for Brazilian IT providers to market services to US buyers and technology partners. Together with the show floor pavilion, the initiative is also sponsoring company specific boardroom presentations for C-level executives. These presentations have a success track record of actual contract deals in the past events and are the perfect environment for business.

Brazilian companies interested in being part of this event, may email or directly SOFTEX at for further details. US companies interested in attending the ITXpo 2009 show floor only can also contact the same addresses for a complimentary invitation. Space is limited; please contact us as early as possible to guarantee your participation.

Click here to download the PDF file with the Everest Research Institute paper.

Report Excerpt

Executive Summary
Now that the U.S. economy is "officially" in a recession along with a dire
outlook for 2009, the prospects for outsourcing, ironically, appear much
better. The negative economic outlook remains discouraging; but the greatest
hindrance to outsourcing is uncertainty, and the economy is finally moving
beyond that noncommittal midpoint.

In preparation for a difficult 2009, executives are evaluating programs they
can prune, investments they can postpone, and projects they can terminate
without impacting company strategy. Given that most companies outsource at
least one operation, it is natural that some outsourcing contracts will be partly reduced in size or scope as part of this adjustment.

In 2009, Everest Research Institute believes that increasing numbers of
companies will take a more strategic view of operations. Companies will
examine methods to reengineer business processes or to restructure backoffice
operations, resulting in an increasing number of outsourcing
opportunities during 2009.

As the economy recovers, Brazil can play a stronger role in providing
globalization services to the United States and Europe. With its cultural and
geographical affinity to the United States and Europe, Brazil can be an
alternative to India as globalization matures. Rather than displacing India,
however, Brazil should expect to become an alternative for risk diversification,
competing with Eastern Europe and China, Brazil must demonstrate how it
can integrate into a global delivery structure rather than compete directly with
India.

Brazil's domestic market is also likely to see some increased competition as
outsourcing players from around the globe seek new growth markets. Both the
nature of competition and the industry structure may evolve as players seek to
compete more aggressively for business in Brazil.

This report examines the following topics:
• U.S. and European market pressures
• Impact on service exports
• Impact on Brazilian domestic market

Click on the link to hear the Podcast of Robert Janssen on an interview with Mark Kobayashi-Hillary?

PODCAST Interview

During the last economic downturn after the dot-com implosion, an increasing number of organizations shifted IT work to outsourcing providers, many of them overseas.

Amid the current economic uncertainty, market watchers can't agree on the direction outsourcing will take. Some businesses will probably opt to kill existing outsourcing arrangements to cut (or at least freeze) costs, but some in the industry expect the economic downturn to result in a net gain for outsourcers.

According to Forrester Inc., which last week issued its revised IT spending forecast for 2009, IT spending as a whole will fall by 3 percent, triggering an attendant drop in outsourcing activity. "Global IT services and outsourcing will decline," read a recent Forrester release.

The upshot, according to the firm, is that government and private-sector customers will spend 3 percent less on outsourcing this year than they did in 2008. "IT outsourcing services will do a bit better than IT consulting and systems integration services, with the latter vulnerable to the slowdown in purchases of software to be implemented and integrated," Forrester concluded.

On the other hand, market watcher Gartner Inc. conceded that things seem bleak — and that it's during bleak times that outsourcing traditionally thrives.

"Although things look gloomy for the larger global economy, the outsourcing market represents a dichotomy: On the downside, organizations' cost-cutting outsourcing strategies may negatively impact market growth, but at the same time, the upside is that outsourcing will be adopted by more organizations to help them work through financial and competitive challenges," said Allie Young, vice president and distinguished analyst at Gartner, in a statement.

What it all adds up to, according to Young and Gartner, is the potential for outsourcing to make big gains. "The well-educated buyer and provider will have the advantage. The potential for outsourcing to address immediate cost pressures as well as long-term recovery goals will be unprecedented," Young said. "However, only organizations that are diligent about understanding and avoiding the pitfalls of cost-focused outsourcing and that apply business-outcome-focused outsourcing will be successful."

In the near-term, outsourcing activity could temporarily contract as companies focus on cost-cutting and re-evaluating existing outsourcing commitments. Arrangements that haven't resulted in anticipated efficiencies, synergies or — most importantly — cost savings could go by the board, Gartner said.

That's not all. Many customers will look to tweak their outsourcing arrangements chiefly in response to changing corporate fortunes, such as downsizing and merger-and-acquisition activity.

At the same time, shops that have thus far refrained from outsourcing — or have made only tentative outsourcing moves — could aggressively enter the mix, particularly if the economic situation worsens. For these customers, Gartner said, the impetus isn't so much to cut costs (although cost-cutting should remain an important driver) but to refocus their efforts on core business competencies. That means divesting themselves of non-core responsibilities — such as information technology.

A Buyer's Market
Regardless of who's outsourcing or why, it should be a buyer's market. Over the coming year, Gartner predicted, competition in the outsourcing segment will be especially fractious. Given the outsourcing segment's history of turnover (for example, according to Gartner, last year more than three-quarters of all announced outsourcing contracts were new deals) the coming year could test even the most well-founded of client/provider relationships.

"Almost one-quarter of contracts announced in 2008 were a continuation of outsourcing with an incumbent provider. With the continued uptake in selective outsourcing, a provider can remain a key supplier of services to a particular client, yet potentially lose a portion of its historic contract value," Young said. "Key providers are betting their future on forming enduring, long-lasting client relationships. In uncertain economic times, outsourcing relationships can prove — and test — the durability of relationships and the outsourcing value proposition."

Elsewhere, Gartner said, so-called "alternative delivery models" (or "ADAMs") could surge in popularity. ADAMs include non-traditional procurement schemes, such as cloud computing or software-as-a-service (SaaS). Other ADAM-like arrangements include "business process utility" (BPU), "infrastructure utility" (IU) and "remote management services" (RMS), according to Gartner.

You'll hear much more about ADAMs in the coming half-decade, Gartner said. "ADAMs are becoming more pervasive in many, if not all, aspects of IT development, delivery and management," said Ben Pring, research vice president at Gartner, in a statement. "Market excitement over new delivery methods is intensifying and whetting buyers' appetites for new options and services that promise greater flexibility, speed-to-solution, lowered capital investment and pay-for-use models."

Whereas India, China, Eastern Europe, and Russia get the most attention when it comes to outsourcing IT work, Brazil is fast becoming a competitive destination, offering top-quality IT talent in an intriguing location, business-wise.

Of course, every location and workforce, including here in the States, has pluses and minuses — be it wage scale, time zone, professionalism, or understanding of business requirements. With that in mind, Brazil offers a workforce of IT professionals worth considering for your next outsourcing endeavor.

For tips on landing an IT job in Brazil and beyond, see InfoWorld's guide to offshoring yourself.

I spoke with Antonio Moreira, CEO of Stefanini IT Solutions' North American operations. Stefanini is a Brazilian IT service provider with 7,000 employees specializing in IT consulting, software development, and integration.

Brazil: an alternative to India and China
First off, Moreira doesn't believe that choosing between, say, India and Brazil as your outsourcing location necessarily has to be an either/or proposition. Rather, he believes companies may want to mitigate risk by using alternative sites.

That said, Moreira does promote Brazil as a place with a lower turnover rate than India, and as a place where IT professionals have a high degree of technical skills and business savvy. Stefanini, for example, experiences an average of 15 percent employee turnover, Moreira says.

As for technical skills, São Paulo has the second-largest community of Java programmers outside of the United States.

Brazil also has what Moreira calls a "western" business culture, including a large financial and banking industry footprint. This means the Brazil IT workforce includes a great many mainframe programmers as well.

"Brazil has a fabulous infrastructure to support the banking industry, and it is leveraged for other industries," Moreira says.

Moreira also says that if you have a Brazilian team on a project and there is a problem that would jeopardize the delivery deadline, Brazilian IT culture is such that Brazilians will share that information with the team back in the United States immediately.

"Brazilians are more proactive," Moreria says. "If they see they are not able to meet the deadline, they do something. They won't wait until the last minute and then say they can't meet the deadline."

I spoke with two U.S. companies about their experiences working with the Brazilian outsourcer.

HNI Corp., in Muscatine, Iowa, and Idera, based in Houston, turned south to Stefanini rather than east to augment their IT staffs.

HNI, a large office furniture manufacturer, and Idera, a software company that creates tools for managing and securing Microsoft Windows Server, first turned to outsourcing because the available local talent pool in their respective areas was tight.

Rural Iowa isn't the easiest place to find IT talent or attract young, upwardly mobile IT professionals, says Mike Roelf, applications manager at HNI. Moreover, Roelf adds, HNI competes for the available talent pool with local giants such as Monsanto and John Deere.

Competition is what keeps Idera from finding sufficient IT talent in local Houston, as it draws from the same pool as do the giant oil and gas companies.

"We compete with the energy industry here, so anyone that can write code, even poorly, is hired by those companies," says Rick Pleczko, Idera's CEO.

Those are the companies' rationales for outsourcing. But why Brazil, I asked Pleczko and Roelf?

Brazil's advantage No. 1: Synchronized business hours
Time-zone overlap proved key to both HNI's and Idera's decisions to outsource to Brazil.

Idera's Plezco says that trying to manage an outsource development team across an 18- to 24-hour time difference would be a daunting task that would have to change the way Idera's teams work.

"If we had a time-zone difference, we would have to write amazingly detailed specs and hand them over and wait for a period of time for feedback and agreement before we let them build. That's not the way we work," says Plezco. Idera's development teams work iteratively. The teams are "exploring and learning as they go."

"What we needed was an outsource team that could provide us with remote people but who could embed themselves in our teams rather than having a separate team," Plezco says.

São Paulo is never more than three hours ahead of the Eastern time zone in the United States, giving Stefanini the ability to adjust hours locally to suit the customer.

For HNI's Roelf, the biggest internal barrier to a successful outsourcing partnership is developing the kind of documents, aka "artifacts," that work well with the outsourcer's environment.

With a decade's work with outsourcers in India, and having traveled to Beijing, Shanghai, and Hong Kong, Roelf has come to realize that outsourcing venues such as Brazil offer much fewer hurdles to collaboration in terms of the culture of IT here and abroad.

Brazil's advantage No. 2: Cultural alignment of IT
Plezco adds yet another plus to working with a near-shore country that shares many of the same cultural values.

"We didn't want the culture of 'You tell me what to build, and I will build it, even if I think it is the wrong thing to build,'" says Plezco.

Working with IT staff in Brazil has provided a different experience for Plezco. In Plezco's experience, a Brazilian team will say something like, "We understand what you are trying to do, but we think you will be better off to do this another way."

"This approach is prevalent in the Brazilian workforce," Plezco says.

Cost savings over U.S.-based talent is about two to one, says Plezco.

Both companies believe they could not have developed the number of applications they have completed if they didn't outsource.

"Brazilians embrace the opportunity to work long hours without saying a word, and the next day they are right back first thing in the morning," Plezco says.

Softex with the support of APEX, is once more sponsoring for the 5th time the Brazil IT initiative at the Gartner ITXpo 2008. The event will take Place at the Dolphin Hotel in Orlando, FL from 12th to 17th of October.

The Brazil IT pavilion is an opportunity for Brazilian IT providers to market services to US buyers and technology partners. Together with the show floor pavilion, the initiative is also sponsoring company specific boardroom presentations for C-level executives. These presentations have a success track record of actual contract deals in the past events and are the perfect environment for business.

Brazilian companies interested in being part of this event, may email or directly SOFTEX at for further details. US companies interested in attending the ITXpo 2008 show floor only can also contact the same addresses for a complimentary invitation. Space is limited; please contact us as early as possible to guarantee your participation.

May 20 (Bloomberg) — When Catarina Delboni traded in her generic computer for a new system from Hewlett-Packard? Co., she joined the ranks of Brazilian consumers taking advantage of lower prices and payment plans to buy from the top U.S. brands.
Her old machine was a lumbering Frankenstein pieced together with parts from different companies, said Delboni, a 22-year-old engineering student in Sao Bernardo do Campo. The new one, bought in March for 1,800 reais ($1,084) with her father's credit card, is faster. Spreading the cost over 10 payments ``definitely made my life easier,'' she said.
Brazil ranked as the fifth-largest PC market last year as bank credit offers, installment plans and growing prosperity fueled purchases, especially among low-income consumers. The shift is a boon to Hewlett-Packard? and Dell Inc., the world's top PC makers. A tax break for PC makers has allowed them to cut prices and compete with unregulated sellers whose so-called gray- market machines dominated the market.
``You have a consumer market that's exploding as people have more access to credit, said Mario Anseloni, managing director of Hewlett-Packard's Brazil division. ``That's transforming the whole economy.
Demand in Brazil is helping PC makers expand revenue as U.S. spending slows. Hewlett-Packard?, which generates two-thirds of its sales outside the U.S., may disclose fresh evidence of the trend today when it reports second-quarter results. Sales grew 11 percent to $28.3 billion in the period, according to a preliminary report last week.
Overtaking TVs
Total Brazilian PC shipments rose 38 percent to 10.7 million units last year, according to research firm IDC in Framingham, Massachusetts. That marked the first time that shoppers bought more PCs than television sets in the country. Brazil's PC market, which ranked seventh in 2006, is poised to take third place by 2010, behind the U.S. and China. Japan and the U.K. are now third and fourth, IDC said.
Palo Alto, California-based Hewlett-Packard? fell 58 cents to $46.71 yesterday in New York Stock Exchange trading. The shares have declined 7.5 percent this year, dragged down last week by concern that its $13.2 billion acquisition of Electronic Data Systems Corp. is too costly. Round Rock, Texas-based Dell, down 14 percent this year, declined 11 cents to $21.20. 5
Brazil's economy last year grew at the fastest pace since 2004 and should be able to maintain annual growth of as much as 4.5 percent, Standard & Poor's said in April after raising the country's debt rating to investment grade for the first time. The upgrade will spur foreign investment, furthering economic growth.

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According to IDC, IT in Latin America will create 630 thousand new jobs until 2010. Brazil, as the largest pool with 892 thousand IT workers today representing 47% of total IT positions, will benefit the most. The new jobs will be created on the software segment, which represents today 69% of the Latin America IT sector, which totals 1.3 million jobs. IDC also predicts that by 2009, software will grow to 74% of an 1.8 million jobs market.

No single nation dominates the IT and business process outsourcing industry in the Western Hemisphere, and Brazil is eager to claim the title. It ultimately wants to compete with India, and industry promoters say proximity and cultural similarities to the U.S. make it a better fit than India or other outsourcing nations in Asia.

An arcane tax system and the lack of a qualified workforce have so far stifled Brazil’s ambitions to become a force in the global business process and IT outsourcing market. But that’s changing, as Latin America’s most populous nation attempts to claim a bigger portion of an outsourcing market annually worth some $45 billion, according to McKinsey? & Co.
In 2007, Brazil hopes to tally $800 million in outsourcing revenue, compared with $600 million in 2006. Its goal for 2010 is $5 billion, says Antonio Gil, chairman of the Brazilian Association of Software and Services Export Companies, a trade organization in Sao Paulo.

No single nation dominates the outsourcing industry in the Western Hemisphere, and Brazil is eager to claim the title. It ultimately wants to compete with India, which claims 70 percent of the international business process outsourcing market.
Brazil is making important gains, drawing Whirlpool Corp. and Gap Inc. as outsourcing clients for tasks ranging from IT services to back-office work. Meanwhile, IBM, Accenture and Electronic Data Systems are expanding and hiring more employees in Brazil to accommodate projected growth.

Gil says Brazil has several advantages over India. For one, it is in similar time zones and in closer geographic proximity to North American companies that offshore their operations. The U.S. also shares more cultural similarities with Brazil than India or other outsourcing nations in Asia, he says.
"The countries share many cultural references—music, movies, television shows, etc.," says Carlos Diaz, vice president of Pan-America? and global accounts officer for Meta4 and an expert of HR issues in Latin America. "You wouldn’t have to explain who Mickey Mouse is to a Brazilian, but that may not necessarily the case when it comes to somebody from India."
"Outsourcing is not just about completing a project; it is also about having a relationship with a vendor that you know and trust," Gil says. "This becomes much trickier when your outsourcing partner has different cultural sensibilities and is on the other side of the world."

Outsourcing to Brazil is costlier, given high taxes and a relatively strong national currency. Still, the expenses may be offset by relatively low turnover rates, ensuring project consistency and cutting the risk of mistakes. Gil says Brazil’s turnover in the outsourcing industry is roughly 20 percent, compared with India’s rate of about 40 percent.
Outsourcing to Brazil makes sense, according to Alexandre Brandao, manager of business support center for Exxon Mobil in Sao Paulo. He says Brazil is particularly strong in IT and business processing. However, handling customer support services via domestic call centers may be a challenge because of a lack of English speakers in the field.
Brazil faces a major hurdle in its need to produce a sufficient number of workers who have both the appropriate language skills and the technical training to keep the country’s outsourcing plan on pace for 2010. Gil estimates that 100,000 additional workers will be needed. Currently, there are 10,000 Brazilians working in the outsourcing industry.
Gaining ground on competing nations won’t come easy, says Bruno Laskowsky, a partner at consultancy A.T. Kearney in Sao Paulo. "This is not a game for kids," he says. "Brazil is going to have to invest significant resources if it is going to achieve its goals." What’s more, the private sector and the government will have to work in tandem.
It appears that this is already taking place. Government officials and the Brazilian Association of Software and Services Export Companies, which includes 29 companies, meet regularly. They retained A.T. Kearney to deepen their fundamental knowledge of the global outsourcing industry and to create a plan, Laskowsky says.

The association, the Ministry of Labor and the Ministry of Sciences and Technology are funding several initiatives, including a pilot program that includes six months of e-learning and classroom technical training to be followed by intensive English-language studies. Some 8,000 individuals in 14 cities are enrolled in the pilot program, Gil says.
Gil also is meeting with government officials to lobby for lower taxes for multinationals.
"An increasing number of people realize the country needs to modernize its tax system in order to compete effectively in the global marketplace," Gil says. "There is growing momentum and I think we can succeed."



Gina Ruiz is a Workforce Management staff writer based in Los Angeles. E-mail to comment.

With the motto “We do Business As You Do”, Brazil IT, the cooperative initiative, partly sponsored by SOFTEX (Association for Promoting the Brazilian Software Excellence) and APEX (Trade and Investment Promotion Agency), is sponsoring the Gartner Symposium / ITXpo event. The 2007 edition will be held at the Dolphin Hotel in Orlando, Fl, from 7 to 12 of October.

With a one trillion dollars economy, Brazil is called home by 95% of SP500 companies. The market demands created a pro active IT services industry, creating solutions with emphasis in the western culture affinity and cultural plurality, praising customer service and efficiencies. As stated by Djalma Petit, Softex Export Coordinator, Brazilians are rich in “Resolutiveness”, which is translated as the capacity to effectively deliver solutions to resolve problems.

For the 2007 edition of ITXpo, Brazil IT is bringing the following top software and services provider:


www.actminds.com
A Global IT services provider led by a team of highly qualified and certified professionals with CMMI-5 and PMI. Actminds strengths are methodology and process, with an in-depth understanding of technology and business, as well as flexibility and adaptability to our client's needs.

With Clients such as Yahoo, Johnson & Johnson, BankBoston?, Goldman Sachs, Lucent Technologies, General Motors and Volkswagen, Actminds' development centers are in a compatible time zone with the US East Cost, only one time zone east of New York.

www.lightinfocom.com.br

Lightinfocom is the creator of LightBase?, a full text-retrieval database with RAD - Rapid Application Development, a "programming by form designing", withof multimedia - sound and images -, Internet access functionalities and full-text-retrieval capabilities. Lightbase has received 5 Brazilian Productivity Awards and was selected as Editors Choice by PC World Spain.
Lightinfocom provides full customization services and support for lightbase and has implemented its products for the Spanish National Police, Interpol, Ministry of Defense (Brazil and Spain), ISTIC (China), Barclays Bank, Brazilian Ministry of Health, Infraero (Brazilian Airport Agency), Bradesco (Brazilian Bank) and GOL (Low Cost Brazilian Airline)

www.modulo.com

Successfully implementing over 4,000 security projects in more than 1000 clients, Modulo Security is Latin America’s market leader for IT governance, risk and compliance management. The company was founded in 1985, currently employing 300 people. Modulo Security received the first Certified ISO 27001 in the World, which sets the standards for Information Security Management System.

Modulo’s Risk Manager™ is a product that automates the processes required for assessing and eliminating security vulnerabilities and attaining regulatory compliance. The product is a result of a seven year of development process, becoming a mature and well proved product, being used by over 50 consulting firms and is implemented in 200+ companies worldwide, such as: IBM, Schlumberger, Santander Bank, Microsoft, Xerox, FMC Technologies,VisaNet? ( VISA ), Redecard ( Mastercard ), and New York University Hospital.

www.politec.com

Brazil, United States, Germany, Belgium, China, France, India, the UK, and Japan. For nearly 40 years the world has come to know and respect Politec's capabilities, which are also available for your company. Politec offers world-class services throughout Brazil, with 15 technology centers strategically positioned throughout the country, and innovative solutions that are recognized worldwide.

As a leader in the sector, Politec always stands behind its clients. After all, IT intelligence means thinking ahead. So far ahead that when you're thinking about the long term, Politec will be ready to take you there. Politec has more than 6,500 trained professionals who deliver consistent results for our clients and whose work has made Politec the most highly trained private-sector Brazilian company in Information Technology services.

Here are a few examples of recognition by the international community:
- World Economic Forum New Champion Global Growth Companies Founding Member (Sep/2007);
- Included in the Global Services GS100, a prestigious annual list of the world's 100 most innovative service providers, as well as named a South of the Border Leader (Global Services magazine, Feb/2007);
- Top 10 Best Performing IT Services Provider (Global Services magazine, Feb/2007);
- 2nd in Gartner’s top 15 “Emerging Outsourcing Players" (BusinessWeek magazine, Jan/2006)

www.stefanini-usa.com

Stefanini IT Solutions has been ranked among the top ten End to End Global Outsourcing Vendor in a survey by the Brown & Wilson Group, publishers of the best-selling book The Black Book of Outsourcing. Ranked #9 in 2006, Stefanini IT Solutions is the first South American company to enter the ranking.

Founded in 1987, with over 5,000 employees in 32 offices in 14 countries in South America, North America, Europe, Africa, and India, Stefanini has over 1000 clients worldwide. With ONSHORE, NEARSHORE and OFFSHORE Capabilities, Stefanini offers Professional Services, Managed Services, Staff Augmentation, and BPO. Stefanini was the first Brazilian company to achieve CMMI 5 certification.

The company is in the USA since 2001 with offices in Ft Lauderdale, Atlanta and New York and has more than 40american clients, including top Fortune 100 companies.

ABOUT SOFTEX (www.softex.br) - Society for the Promotion of Excellence in Brazilian Software - SOFTEX - is a non-profit organization that promotes the Brazilian software and related services industry's competitiveness. SOFTEX has more than 1,300 members.

ABOUT APEX-BRASIL (www.apex.org.br) The Brazilian Export and Investments Promotion Agency - APEX - is a government agency focused on promoting Brazilian products and the country image.

For more information on Brazil IT or on how to participate on the event, contact .