Latin America: A 'Hot' ICT Destination

There is something about LA (Latin America) that sounds so exciting today, and its not about the exotic locales or beautiful faces. It's about the region's flourishing ICT industry that is quickly capturing so much of attention, from across the world.

The Latin American IT market is growing at an alarming rate and enterprises will be acting foolish if they let go of the opportunity. IT spending in the region has been beating the global average in the last 10 years. The IT market that is currently around $124B in 2012 is expected to reach $166B by 2016, that is a hike of 34 percent, according to IDC.

Growing hype around latest technology trends like cloud, big data and social media is increasing opportunities for IT players, as enterprises in the region are opening up to newer services that they were hesitant to get into earlier.

As part of its predictions for 2013, IDC estimates that the Latin American ICT industry is in a transformational phase, one that happens only in every 20-25 years. The region is moving to what is called the 3rd Platform driven by new technologies like cloud, big data analytics and social technologies. By 2020, around 80% of the industry growth will be driven by these 3rd Platform technologies. On one side demand for new technologies is picking up as enterprise users are and consumers are embracing smarter technologies, and on the other side IT players are coming up with lots of new technology platforms. So its going to be a win win situation.

Nearshore IT Opportunity

Striking developments in the region's ICT market is also expanding its scope as a nearshore IT outsourcing destination. Latin America has been strong in the voice BPO space, with some amazing multi language capabilities that are difficult to find in other parts of the word. But with its ICT industry also gaining strength, the location is also going to be very prominent for nearshore IT outsourcing.

According to a Tholons report the the share of services sector in the overall productivity has been going up consistently. Certain locations in the Central and South American region have also been making it to the top global outsourcing destinations list every year. Its prominence is only becoming more evident now. The region has bagged some really big deals off late and some of these are $100M, long term deals of five year or so.

It's cultural compatibility with the US and Europe gives it an edge in nearshore outsourcing. Offshore IT/ITES countries like India too are being bullish on the region with many of them opening their own delivery centers in the region. Biggies like Infosys and Wipro already have delivery centers in LA.