Mexico in pole position for Atos' planned outsourcing center

Tuesday, November 8, 2011

Franco-Dutch IT company Atos (formerly Atos Origin) plans to open an offshoring center in Latin America in 2012 to provide services to the US, and so far Mexico seems to be where this will most likely take place, Juan Dabusti, Atos' newly named CEO of the Austral Andina cluster, told BNamericas.

"We're evaluating Mexico, Colombia, Peru and Costa Rica to set up an offshoring center in 2012. Mexico and Colombia have a handicap in favor, due to their market size," said Dabusti, who was previously CEO of Atos Argentina. "In the case of Mexico, it's close to the US, there are areas around and just outside of Mexico City being promoted [with tax incentives], and the Mexican market has been in recession for the last two or three years and should explode soon."

In turn, "Colombia has an advantage in that its municipalities are promoting their cities and making sizeable investments to attract foreign firms like those from India," he added. "There is also a direct, very important investment in infrastructure that minimizes costs for companies, and it's the third largest Latin American IT market [moving] US$1.8bn."

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The move marks part of Atos' plans to expand in Mexico, Colombia and Chile. In the latter two countries, which Dabusti said presented similar challenges, the idea is to drive growth in specific sectors: manufacturing, public sector (transport and citizen services) and energy. "Telcos and finance are also very interesting sectors, but those markets are extremely competitive with all the players - IBM, Sonda, Indra, Accenture, EDS," he added.

In Chile alone, Atos plans to be a top-five player within the next five years; today it moves about US$8mn-9mn a year for some 0.5% of the total market. The idea is to expand both organically, with investments in human capital, and inorganically, with above market growth at some 20-25%. "And personally I think the Chilean market has two leaders - Adexus and Sonda - and the rest is fragmented, so we have the chance to introduce our applications considering our experience with SAP. We'll start focusing on SAP applications management, in systems integration management and in manufacturing systems."

Meanwhile, Atos' market position is fairly consolidated in Argentina, he noted, "and in growing we'd have to take market from competition like IBM, Accenture and EDS, which would be difficult. And Brazil is an extremely competitive market as well, with more than 20 players in the market. But we can't ignore Brazil - it's 50% of GDP and 50% of the IT market, at about US$10bn."

In Latin America, the firm expects to sell about 170mn-180mn euros (US$235mn-249mn), which according to the executive would be some 4-5% of the overall IT market.

In July 2010, Atos shareholders approved the acquisition of Siemens IT Solutions and Services. The acquisition doubled Atos' storage capacity and processes for cloud computing, with now more than 30 worldwide data centers, 900,000 SAP users and 90,000 global servers.

In turn, Siemens became Atos' largest shareholder and outsourced all of its IT needs to Atos.

In Latin America, Atos has a regional data center in Buenos Aires and a global data center in São Paulo. Last year, the company posted global revenues of 8.6bn euros. It has more than 74,000 employees in 42 countries.