Software and Mobile Services Propel Uruguay to Over $600 Million in Exports

It’s not often that  Uruguay is mentioned in the same breath as major Latin American software innovation hubs – such as Santiago, Guadalaraja or Sao Paulo. The country …

Montevideo, Uruguay.

It’s not often that  Uruguay is mentioned in the same breath as major Latin American software innovation hubs – such as Santiago, Guadalaraja or Sao Paulo. The country doesn’t have the same brand recognition of those locations, but Uruguay is appearing to perfect the ‘slow and steady’ approach to becoming a top tier player in software development methodologies, e-commerce and Web app development.

Recent mergers and takeovers have led industry players to keep a watchful eye on what happens in the place formerly known as “the Switzerland of the Americas.” Uruguay earned the nickname for being the first welfare state in Latin America, with a solid democratic tradition, advanced education and a social security system. The country also has stayed more affluent than most of its South American neighbors. Its software industry generates over US $600 million every year, with exports to over 50 countries.

Big players like Eric Ries’ New Context, NetSuite and even Microsoft have partnered with Uruguayan companies or opened offices in the country in the past five years.

Uruguay’s government provides free laptop computers to every child attending school and 99 percent of the population has broadband access. Tech-savvy young people will populate the future labor pool. There are also attractive tax breaks to encourage the development of the IT industry.

IT Buying Spree

That’s probably part of what lured New Context into buying the 20-person Uruguay-based Ruby on Rails development team that Twitter architect Ewan Henshaw-Plath created a few years ago. Or the reason why business software suite titan NetSuite took over Uruguayan based Gproxy and SuiteCommerce in the past few months.

What New Context found most appealing about Uruguay’s Cubox was the company’s expertise in working with lean startup clients and the fact that the team was able to offer “customer development as a service,” focusing on test-driven development, short release cycles and open source contributions. Henshaw-Plath explained that “building a startup isn’t just about creating its code, you need to have a better process around building the business.”

The situation with Gproxy and SuiteCommerce was a little different, with both companies  having been NetSuite experts for years, developing sites and exploring new functionalities for the platform. The partnership somewhat naturally led to acquisitions. Uruguayan branches of both companies are now devoted to providing NetSuite solutions and further developing its features.

Software Startups

Not all shops are run by foreigners, though. Uruguay natives are leading companies that are doing great things, too.

One of the Uruguayan IT pioneers is InterMedia, a Uruguayan software solution company founded in 1998. A Microsoft Certified Gold Partner, the company’s mobile application development team produces solutions for iPad, iPhone, Windows Phone 7, Android and BlackBerry.

Uruguayan company UruIT, which also has offices in Santiago Chile, prides itself on the mobile team it has assembled and the kind of work it does with Windows Phone. Originally focused on Microsoft development, the company recently expanded into creating a non-Microsoft business unit to deliver solutions for iPhone, iPad and Android as well.

“When it comes to mobile platforms,  Android and iOS are at the top of the list, which is why we began exploring different OS and cross-mobile technologies and nowadays have a team specialized in mobile which allowed us to broaden the scope of what we can offer” says UruIT’s Milton Rodríguez.

Another local startup is Suricata Team, a young company devoted to mobile app development, mainly for iOS (iPhone, iPod and iPad) and Android, porting Facebook games to mobile platforms.

Santiago Melluso and Isabel Baez, the husband-and-wife founders of Farm.Co, a digital communication, marketing and design agency specializing in new media, recently opened Montevideo offices housing a design and development team that supports teams in Madrid and the U.S.

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NetSuite partners, Mailchimp experts and Expression Engine-recommended professionals, Farm.Co’s Montevideo-based dev team is currently developing an application that allows users to carry medical information on their mobile devices, with notification for appointments or tests. The app will also allow users to take and upload pictures or scan documents via their mobiles.

For another client, Farm.Co is working on an app that helps configure a house or a hotel. From a mobile dashboard, users can control air conditioning, lighting and home security. In the near future it intends to introduce location-aware apps that allow users to download content relevant to their surroundings, such as museum guides or information about nearby businesses.

Uruguay’s Opportunities, Challenges

Farm.Co’s CTO, Horacio Prieto, says Uruguay is slowly but steadily becoming a stable and reliable hub for information technology and software development.

“At the beginning, Uruguay was a hot near outsourcing destination, because of relative cost and the country’s characteristics in terms of education and stability. But a few years ago, it became stronger,” he says. “The country was able to crack several markets, and there is good talent to be found here, which makes us more attractive to big players.”

This tech explosion does create some challenges. Uruguay lags behind some other part of the world in the arrival of new technologies. “For example, we are still waiting for digital TV to be fully functional in order to begin working on interactive apps for these platforms,” says UruIT’s Milton Rodríguez. “Other countries in the region are years ahead in this, not to mention North America, Europe or Asian countries  where digital TV has been a reality for many years now.”

Another challenge is the competitive labor market. Prieto says tech companies like his often fight over top talent.

Prieto is optimistic about the growth of the market in the next few years, however, and trusts both in the growth of the global mobile market and the capacity of the Uruguayan industry to deliver.

Pat Antuña Yarza is a freelance writer and translator based in Montevideo.

This story was first appeared in NSAM sister publication Global Delivery Report

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