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Why Argentina is key to the expansion of Brazilian cloud firm Dedalus

Bnamericas Published: Wednesday, July 13, 2022

Brazilian cloud services company Dedalus sees Argentina as the key pillar of a three-year investment plan to expand outside its home market.

The firm’s current goal is to have 25% of its revenues coming from countries other than Brazil by 2025, up from the current 5%, CEO Mauricio Fernandes told BNamericas. 

Argentina is the hub of Dedalus' regional operations, from where it provides services to clients based in Chile, Peru, Bolivia, Colombia and Uruguay. 

“Three years ago, we chose to open an operation in Argentina considering a few factors: an abundant and highly qualified [technology] labor force and a very good domestic market, especially in agribusiness and financial services,” Fernandes said. 

“We were right and now we want to leverage on that further,” he added.

Dedalus provides intermediation and contract management for companies seeking to deploy public cloud platforms, such as those from AWS, Google and Microsoft, in addition to consulting on digitization projects in general. 

It reports having a total of 1,000 customers in sectors such as the financial industry, retail and telecom. 

More than 80% of its clients operate multi-clouds, that is, they use more than one cloud brand. Fernandes said that Dedalus has customers with up to five different clouds running.

While the firm’s international sales are still relatively small, the CEO sees room for expansion on the back of cloud growth. Last year, sales generated from Argentina grew 120%, compared with 52% for the whole company. 

Dedalus projects 50% growth in 2022 to 500mn reais (US$92mn) in sales, with revenues from Argentina potentially doubling.

The firm has not published capex figures, but Fernandes said Dedalus is investing mostly in hiring more staff in the country.

He recognizes that the availability of qualified manpower has diminished, not least because the demand for skilled technology professionals has risen worldwide after the start of the pandemic.

To tackle that, Dedalus is training professionals through a “cloud school”. Around 300 professionals are expected to be made available for the market this year and although there is no exclusivity agreement, many of them will likely be hired by Dedalus.

OTHER MARKETS

While the firm’s focus on Latin American expansion is centered on Argentina, Dedalus is considering launching operations in Colombia and/or Mexico in the next three years, said Fernandes.

Overall, he said that sees the rest of Latin America “about four or five years behind” Brazil in terms of cloud adoption, but it is catching up and it is this more rapid growth on which the company is betting.

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