SM: Actually, TCS (Tata Consultancy Services) has set up a major Latin America operation.
BT: They do. TCS probably is the Indian vendor that has the largest call center here in Latin America. They do have a strong presence in Brazil, and from Brazil, they support global clients. They won, a couple of years ago, some government projects here in Mexico. I don’t believe they’re working for the government here anymore. But I think – as opposed to what other Indian vendors look at when they look at Latin America – TCS was looking at the region not just to offer service from the region but also looking at the Latin American market.
SM: Yes, they are. I spoke with the guy running TCS Latin America, and he gave a projection of, I think, they’re planning to hire 25,000 people by 2015 or something like that.
BT: Yes, I heard the same thing. That is different. When you look at all the Indian vendors, I think, if they look, they never consider Latin America. They look at Latin America more as a source for resources and to have that nearshore component and not necessarily looking at offering services for that market. Probably, Latin America in business, has so much visibility that many companies want to be there for that domestic market. But that’s not true for all the Indian vendors. They are looking at Mexico more to have those centers to support the U.S. So, yes, they are here, but TCS is the most mature of them.
SM: So, how do you see the Latin American domestic market evolving? Do you have a number for how big the domestic market is within Latin America for outsourced services like IT services, for instance?
BT: No, I can’t tell you that, but I can tell you that by the end of 2012, the Latin American IT market will have grown to $104 billion … approximately. One thing that you’ll see in Latin America that you won’t see in other regions – probably Brazil is changing in that – as opposed to the U.S., a lot of the work that’s being done is still within the companies, not necessarily provided by the IT vendors. The demand that we can see or that the analyst who researched that demand can see is that in many cases, part of that work, or a very important percentage of that work, is still being done by the companies. So, sometimes it’s difficult to measure that demand.
This is the decade of Latin America. I truly believe that. What we’re seeing is a more active market in different industries companies are trying to be global and understand much better that in order to compete more effectively, technology is a very important component [that they must have]. We’re looking at a region that has a growing demand for technology. You mentioned TCS. If you think about that, TCS having 25,000 people here in the region, I’m sure five years ago, you would never have thought that, in the region, you could have demand for that amount of resources. Brazil is our second largest operation after the U.S. Brazil is today a very sexy market, growing. We all want to be there. Their domestic market is impressive. It’s incredible. You mentioned TCS, but if you also look at Accenture, IBM and HP, almost any IT services provider is looking at Brazil and the demand is certainly growing. So, how do we see the region? It’s certainly right on track and we becoming attractive for two reasons. Our markets are more demanding, but our region is a very strong alternative to provide services to other countries, in this case, to the U.S.
What you see today in the region is more activity to meet the demand of the domestic market, but also to meet the demands that we’re getting from other markets like the U.S. If you go to Argentina, the unemployment in this industry is zero. The same thing goes for Mexico or Brazil. The reason for that is more and more, other players are coming in or clients look at Latin America as an alternative. More and more, those very large corporations, from the region, are also looking at this kind of support. I think the region will grow even faster. We’re seeing that.