Meet Gorilla Logic, Blue Trail Software and Hexacta, three Latam mid-size IT companies focused on talent.
In the infancy of the digital age, Latin America went somehow unnoticed in the software development industry : The US was first busy developing its own pool of developers, and when demand exploded, cheaper Asian and Eastern European countries became the preferred destinations for software offshoring. But mistakes were made and lessons were learned, and US companies have evolved when it comes to software offshoring.
While profitable in the short-term, collaborating with a far-away partner had many drawbacks: Time difference, staff turnover and anonymity, language and culture,… Asia was a painful lost-in-translation experience (mostly in the case of China) and a disappointing experience regarding the quality of the code. Eastern Europe suffered the region’s high-flying currency which led its prices to rise so much that it ended up aligned with US prices, thus killing any benefit to outsource so far away. The US still needs affordable engineers, but now it is looking at Latam as a more strategic software outsourcing destination.
For the past 10 years, most major countries in Latin America drove massive education programs to create sophisticated pools of English-speaking and US-friendly developers. Ready to operate, Latam developers now rely on software companies with great charisma to fulfill the great destiny of software development in Latam.
Latin America, the new software development hotspot
According to Stack Overflow, the number of skilled programmers in Latin America (24K in Peru, 21K in Columbia, 18K in Chile, 16K in Argentina) outnumber by far the number of skilled programmers in China (13K) and India (13K). Argentina launched a program to train 100K developers by 2020. The EF English Proﬁciency Index 2017 showed that English proficiency in some countries of Latin America outperformed China and India.
The time difference with the United States (1-4 hours max) makes it possible to avoid the 2am conf calls with your development team in India. The cost of living being substantially lower in Latin American countries than in the United States, any decent software developer there usually goes for half the price of his US counterpart. The IT industry of Latin American countries has been growing double digits for well over 10 years.
The latest development methods based on agile approaches brought a major difference how where software outsourcers stand in the production process: It made real-time communication a necessity, thus greatly affecting the attractiveness of countries distant from the US, and making Latam a prime choice both culturally and in terms of time zones. When taking the volume of US visitors to China (2 million in 2016) and comparing it with the volume of US visitors to Latam countries (14 million in 2016), one can easily appreciate how the two regions are already strongly interlocked.
Latam is already geographically nearshore, but beyond geography and education programs, innovating companies who champion their field are the ones who put we are in charge of putting Latam on the map. Here are 3 mid-size software companies that stand a chance in the Latam software race.
Gorilla Logic, Costa Rica’s finest
In Costa Rica, a not so small software development company does very well serving industry-class brands such as NBC, Verizon, Time Warner Cable, … Initially based in Boulder, Colorado, Gorilla Logic prospers from its nearshoring model with offices based mainly in Costa Rica, a closeby and very US-friendly in Central America.
Unlike most software firms mismanaging their “less valuable” Latam assets, Gorilla Logic, in operations since 2002, played the Silicon Valley cool-kids card right from the start. It bet on work hours flexibility, work from home days, a hip office ambiance, and the development of strong ties between its US and Latam employees to secure a “no-one left behind” strategy.
Gorilla Logic’s list of clients perfectly illustrates how Latam’s developers are perfectly aligned with the digital needs of the USA: Providing high-resolution earth imagery to DigitalGlobe, maintaining the web assets and backend structure of Medtronic, and developing the public facing technology for NBC… it seems like Gorilla Logic was able to develop a talent team that is just as solid as the ones we find in the US. The company recently announced a round of investment from mid-market investment firm Sverika, a strong indicator of good things to come for the mid-size US-based software development firms mainly active in Latam.
Blue Trail Software, empowering talents
The story of Blue Trail Software, based in San Francisco, exemplifies the global trend of software offshoring that shifted from Asia to Latam. Its founder Rémi Vespa launched his software offshoring activities in 2007 in San Francisco, as a business developer for the China-based firm Venus Software Corporation. Over the years, he shifted away from its Chinese production units to focus on creating and maintaining new ones in Latin America. After opening his first production unit in Tepatitlan de Morelos in Mexico, the company rapidly opened new offices in Uruguay and Argentina to diversify its pool of available developers. The company recently welcomed their employees in their new office in Guadalajara, thus doubling its software development capacity in the Silicon Valley of Mexico.
To approach this multicultural asset, Blue Trail Software bets it all on empowering employees. While the ambiance is laid back, just like any other software office nowadays, the company’s real focus is on feeding the personal enrichment goals of its employees : Reward work with trust, value personality and open communications, bend the management hierarchy to increase fairness, spark opportunities through team-building… According to Rosalba Reynoso who foresees all Latam operations at Blue Trail, «Regarding management, we coach top talents […] Our main job is to channel their potential by creating the work environment that stimulates them the most.»
With this higher philosophical approach of employees’ empowerment, Blue Trail Software seems to have found a serious niche. Its developers have been working backstage at the creation of the Ring video doorbell before, during and after Richard Branson heavily invested in its development. Blue Trail Software is also behind the scenes of the development of Samsung’s Artik, its smart IoT platform, and Bloomlife, the company that develops the sophisticated wearables for pregnant women. With its charisma, its approach to HR, and the diversity of its portfolio, you can rank Blue Trail among the leading tech players in Latam.
Hexacta also spans its production units across Latin America, and a list of clients that shows how leading US and international companies have turned to Latam for prime software development: Fox’ billing and collection system, Philip Morris’ onsite marketing, Sodexo’s voucher management system, Comcast’s B2B web services, …
After surviving the dot-com crash, Hexacta, founded by Juan Navarro, faced another challenge. Unlike Gorilla Logic and Blue Trail, Hexacta is headquartered in Argentina, and the country’s currency issues drove many potential international clients away. To make up for this, Hexacta aligned its process with US industry standards, and started to work its way up the US market. By 2010, 70% of its business came from the US.
In 2017, Hexacta made it the top 100 Global Outsourcing leaders by the Centro de Informacion de Publicidad of Argentina. After inaugurating its first US offices in Seattle in February 2018, the company announced the following summer the opening of 2 new offices in Argentina and 1 in Uruguay. 20 new employees were recruited.
Talent-mastering is the word
One factor is a constant in the analysis of these companies: The focus on talent attraction and retention. Where the good developer performs, the great developer outperforms. While Latam is already experiencing an exponential growth of its software sector, it will secure this opportunity only if it fully addresses the following question: How can Latam software companies retain the top talents to drive the global growth of the regional software industry ?
If you know other mid-size software companies active in Latam and similar to the ones mentioned above, please mention them below in the comments.1 comment