Open source could be Brazil's IT offshoring advantage.

For the next week I am going to have a closer look at Brazil as an offshore IT destination. This is mainly because my colleague Angelica Mari is in Brazil now checking its IT delivery capabilities.

Where Brazil might not be able to compete, with destinations such as India, on wage arbitrage and English language skills its open source skills could be a real advantage.

Here is Angelica Mari’s report:

“I am currently in Sao Paulo as a guest of the government and over the next few days, I will be talking to buyers and sellers of technology, analysts and influencers about the potential and challenges ahead for the Brazilian IT industry.

Yesterday, I had an interesting lunch with Flavio Grynzpan, formerly president of Motorola in Brazil. Now a consultant who actively promotes the Brazilian IT industry internationally, Grynzpan is one of those extremely well-connected people who have their ear to the ground, so it was good to get some alternative views before hearing the government pitch.

In essence, his opinion is that despite Brazil’s potential as an outsourcing destination, the country simply cannot compete with other countries such as India in terms of wage arbitrage. The fact that many people in the IT industry don’t speak English fluently – even though that is rapidly changing – is another significant issue.

Grynzpan reckons that Brazil has to find a unique selling proposition and its vast pool of knowledge in open source software could be the real advantage of the local IT industry and could lead to the country becoming a global leader in that segment.

Evidence of that potential is the work carried out by Serpro, the government-owned provider of ICT services to the public sector and one of the largest organisations of its kind in Latin America. For example, the agency generated R$ 370m (£137m) in savings between 2003 and 2009 just by allowing citizens to submit income tax self assessments online with open-source solutions.

In the private sector, noteworthy companies working with open source software include Metasys, which develops educational software based on Linux to promote digital inclusion in schools. The company’s software covers thousands of schools across Brazil and its products underpin major projects led by the Brazilian digital inclusion taskforce.

According to Grynzspan, what started as a protest against Microsoft of sorts motivated thousands of Brazilians to contribute with the development of open-source tools. This market is now very well developed and is hugely attractive – particularly for cash-strapped countries such as the UK – however the Brazilian government needs to do more to unlock that potential and promote it to prospective buyers.

I have also heard some interesting views around the cultural advantages of Brazil when compared to its main ‘rival’, India. More on that in the next post.”