IT companies setting shop in Latin America

 In a move to be closer to their clients in the United States, more and more IT services companies are setting-up shop in Latin America reports CNBC-TV18.

When Gabriel Rozman visits the TCS office in New York, he's in a closer time zone to his office back in Uruguay than to his company's headquarters in India. That's one of the reasons why Latin America is emerging as a new frontier for the Indian IT industry seeking to service its biggest market, the United States, more efficiently.

"We're thinking that if you're in the same time zone, you can replace a lot of the onsite with near shore staffing. In that sense I think the companies are willing to pay a premium over what they pay India, to be in this time zone. And we charge that premium because our costs are higher than in India" says Gabriel Rozman, President, TCS Ibero America

TCS' IberoAmerica division, which operates in the Spanish and Portuguese speaking regions of the world, set up its first office in Latin America four years ago. Today it has a staff of 3,500 in the continent, runs Global Delivery Centers in Brazil, Uruguay and Chile; and will open one in Mexico next January.

Satyam followed TCS into Latin America 2 years ago, opening shop in Sao Paulo, Brazil. While the company has onsite staff in various Latin American countries servicing existing clients, it also plans a big push into the local market, pointing out that Brazil's IT services market alone is estimated to be worth 17 billion dollars.

"What we're looking at is the need to expand outward in Latin America, into Mexico, Argentina, into other regions of the Caribbean in order to service the broader Latin American market. So in the not too distant future, in the next 2-3 years, it's likely that we'll have about a thousand people servicing the Latin American market" Ram Mynampati, President, Satyam Computer Services

“Right now about 20% of the US population identifies itself as Hispanic. It's also one of the fastest growing population segments. If you look at the immigration rate which is about a million people a year, again most of the immigrants are Hispanic" PV Kannan, Co-founder & CEO, 24/7 Customer

Latin America is not yet considered a rival to the Indian IT services and BPO industry as it's still easier and cheaper to service most clients from India.

But the Indian pioneers in Latin America are convinced their competitors cannot ignore the continent for too long. As the advantages of operating from Latin America become clearer, we'll soon find more Indian companies saying: Se habla espanol - we speak Spanish.