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California-based virtualization software firm VMware is looking to expand business in Latin America, with Brazil leading in terms of revenues.
Countries like Chile, Argentina and Peru are a significant niche for the company, with business associates accounting for 99.7% of its 2010 income.
VMware's latest financial report announced a net profit of US$126mn for Q1, up 20% year-over-year, of which Latin America represents "a substantial portion" of business.
BNamericas caught up with VMware's senior director for Latin America, Javier Carrión, to talk about the company's investment plans in the region.
BNamericas: How has VMware been performing in Latin America in terms of growth and revenues?
Carrión: We don't disclose financial results per region. I can tell you that Brazil is our main market, and we have opened offices in Porto Alegre, Brasília and Rio de Janeiro. We're doubling our investment and our physical presence.
As a reference, I can tell you that Brazil represents 50% of revenue for most IT companies. Brazil is a big market; it's the leader in the region.
BNamericas: What are VMware's expansion plans for the region?
Carrión: We keep growing and adding new clients. The markets in Latin America are reacting really well to our technology.
We have a three-year expansion plan. Part of our plan is to get geographically closer to the client. In these terms, we keep growing in Chile. We also have a strong presence in Argentina, and we're planning to open an office in Peru.
[But] owing to recent events in Peru - where left-leaning Ollanta Humala was elected president, causing Peru’s stock to plunge a record 12.5% in trading last Monday [Jun 6] - VMware will wait and see how the political and economic situation evolves.
Peru is a key market for us and an important part of VMware's three-year geographical expansion plan in the region. We have clients in the financial and telecommunications sector in that country.
BNamericas: Apart from Brazil, which other countries in the region are key to your company?
Carrión: We consider Chile to be a very sophisticated market; the use of technology is very advanced when compared with other Latin American countries. But all countries in the region are important for our business.
For example, Mexico is a potentially enormous market for us, and when you consider the Venezuela-Colombia-Ecuador cluster that we have formed, there are some sizeable markets. The region is very significant for us.
BNamericas: What criteria do you consider when evaluating which country to invest in?
Carrión: Well, we take into account the market capacity; we evaluate the economy, the level of technology adoption and based on this information we decide where to invest.
We've been investing for the last three years, and we will continue with the plan for the next three. This strategy is paying off as we are already seeing returns on our investments in Latin America.
BNamericas: Does the investment plan include any acquisitions?
Carrión: No, it does not include any acquisition, apart from those in terms of technology adoption that don't depend on revenue. Our plan includes acquiring talent, so that we can continue managing and increasing our presence in the market through our business partners.
I can tell you that 99.7% of our 2010 income comes through our business associates.
BNamericas: How do you go about finding and hiring talented professionals in the region?
Carrión: We're growing so fast so we need to hire professionals fast. But the level is good, in Chile and in Latin America in general. One of the things we're doing is getting closer to universities, like other companies do. Especially in the cloud market; it's a new market and IT development is key, as we will need to expand our workforce as we grow. So, one of the ways to achieve this is by working closer with universities so that the new technology can be taught there, and the students acquire the skills we require.
One of the programs we have allows those students in their last year of university or recent graduates to join VMware to acquire more technical experience in the company, so when they finish their studies, they already have the knowledge they need to be in the market.
About Javier Carrión
Javier Carrión joined VMware in 2005. He has more than 18 years of experience in the high technology industry in the US, Europe and Latin America.
The executive has worked with companies such as Red Hat Corporation, Netscape Communications and Oracle Corporation before joining VMware.
He has a degree in electrical engineering from Northeastern University in Boston, Massachusetts.
About the company
Palo Alto, California-based VMware has more than 9,000 employees around the world, focusing on virtualization and cloud infrastructure.
With more than 250,000 customers and 25,000 partners worldwide, it billed US$2.9bn in 2010.