Silicon Valley is looking to do business in Latin America

Yesterday night I attended a meeting of SDForum with a focus on Latin America. The meeting was held in Palo Alto, California, near Stanford University.

People talked about the opportunities for selling software based services to Latin American consumers and about providing outsourcing services from Latina America to US corporate customers.

Most attendees agreed that the protection of intelectual property is usually weak in Latin America, as it is in most developing countries including China. Unlike people in wealthier countries nobody wants to pay more than a months salary for the right to use software when it's available on the street for the cost of a CD-ROM media. So selling copies of software was seen as a difficult venture. Instead attendees thought about selling software as a service via the Internet or even via cell phones. Some believe that the cell phone might be the better platform than the computer as it's cheaper to purchase and maintain. Others remarked that in Latin America most computer users are actually using them in Internet Cafes for the cost of about USD 0.50 per 30 minutes.

What seems to work well is the business of providing outsourcing services to US companies. There is no problem protecting intelectual property, because the outsourcing company will respect its client's rights in order to stay in business. And most of Latin American countries have laws in place that protect IP. Theoretically a company can get sued and shut down. The same laws apply to consumers as well, but probably noone will try to enforce such rules against poor people.

My personal impression is that most attendees have very weak knowledge about what the situation in Latin America really is. They have some vage ideas about the level of education and the economic realities. Most think of beautiful landscapes. But they are interested and are looking for places closer to home (for North Americans) to purchase services. It seems that more and more people are realizing that the most prominent outsourcing destination India is not without difficulties. Latin America is mostly within US timezones and flights are reasonably cheap and travel time is only a couple of hours without jet lag.

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