Hypergrowth in Latin America?

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Content Copyright © 2010 Bloor. All Rights Reserved.
Also posted on: The Norfolk Punt

Well, I’m at CA World 2010. It seems like I’ve been following CA for ever; and it has changed amd matured a lot in that time. Is it turning into another IBM (and that’s meant to be positive; I’m talking about about today’s IBM here, not the old 1980s IBM model that Microsoft sometimes seemed to follow)? We shall see, but CA has an “interesting” history and if it is still around and doing well, it must be doing something right.

And that’s not just about changing its name to “CA Technologies” and coming up with differently coloured CA logos (hot news on Sunday May 16th at the start of CA World). According to its new CEO, Bill McCracken, the rebranding “acknowledges both our past and points to our future as a leader in delivering solutions that will revolutionise the way IT powers business agility”.

I hear the rebranding news at a Latin America briefing, which seems appropriate because I’m at the briefing because I think that Latin America may well be more interesting than America/EMEA at the moment. CA’s Latin America (South America) region seems to exemplify the new, rebranded CA Technologies. Kenneth Arredondo (SVP, Area Sales) is talking and he seems inordinately pleased, as he should be, that his region grew by some 50% even in the 2009 “dip” (aka “recession”). Latin America is still buoyant, perhaps because it doesn’t have the baggage regions like EMEA and America carry.

CA Technologies now sees its future in exploiting “hypergrowth opportunities” in regions like Latin America, which are often early adopters of new computing models (such as cloud computing, perhaps). In fact, it has already set up a Growth and Emerging Markets (GEM) initiative, under Australian John Ruthven to do just that. Now, going forwards, GEM seems to be central to its financial year 2011 strategy.

Which is interesting, especially ior areas like Latin America where CA has a very strong brand (it is especially successful in Brazil, apparently). However, it seems to me that CA isn’t alone in seeing emerging markets as an opportunity and IBM, for example, has a strong presence in India and China. In fact, Ruthven admits that CA may be playing catchup in, say, China—but goes on to say that that it is probably well ahead of the pack in other areas (such as, of course, Latin America) .

I believe that many of the issues around taking advantage of emerging “hypergrowth opportunities” may be largely cultural—European and American companies have been guilty of patronising emerging regions in the past—and you certainly don’t want to encumber relationships in emerging regions with your old American/European baggage. Perhaps Latin America doesn’t take spurious stories of the “death of the mainframe” quite as seriously as the West seemed to for a while, for example! In any case, I’m cautiously optimistic about CA’s chances of making a success of this: Arredondo talks about “turning around culture” in CA’s Latin American business and Ruthven comes from what may be an emerging “hypergrowth region” himself.