IT Outsourcing in Latin America: Hot Hot Hot!

I’ve written about the IT outsourcing market in Latin America several times in blogs. You can read some of them here and here and here.

Just today, the outsourcing news media was ablaze with stories on HP’s hefty IT outsourcing win with Coca-Cola in Mexico. The five-year deal with Coca-Cola FEMSA, S.A.B. de C.V. which according to a press release is the largest public bottler of Coca Cola products in the world in terms of sales volume, is a technology outsourcing services contract valued at $100 million.

HP’s division in Mexico has been working with Coca-Cola FEMSA as an outsourcing provider since 2000.Under terms of the new deal, HP and Coca-Cola FEMSA will consolidate 348 locations to a single data center in Mexico and migrate business-critical SAP applications and server monitoring and management to HP locations in Brazil and Argentina. Security services will be provided from HP delivery centers in Costa Rica. HP says it will continue to manage Coca-Cola FEMSA’s technology infrastructure supporting its Latin American operations in Argentina, Brazil, Colombia, Costa Rica, Guatemala, Mexico, Nicaragua, Panama and Venezuela.

In a prepared statement, Coca-Cola FEMSA CIO Hector Calva said HP already knows the bottler’s business and industry well, and is able to provide the technology foundation necessary for growth. “After experiencing sustained growth across Latin America, these additional efforts to centralize and standardize will give us the support we need to find new opportunities to put beverages in the hands of the Latin American people,” he said in the statement.

Additional details of the outsourcing gig include HP’s continued provision of data center and storage services. HP will also host more than 650 midrange servers and backup and restore Services for disaster recovery, as well as hosting services for Coca-Cola FEMSA’s SAP platform. The agreement also includes international and regional telecommunications carrier management services and network management services  for the company’s LAN and WAN environment. HP also provides Enterprise Application Hosting Services for Coca-Cola FEMSA’s SAP platform and will move to dedicated support. HP will also continue to service and support Coca-Cola FEMSA’s 14,500 desktop and notebook PCs, handheld devices, printers and servers.

As expected, the gig includes HP hardware and software. According to the press release, Coca-Cola FEMSA will consolidate its data center on an HP Converged Infrastructure using HP Superdome 2 servers and Integrity BL860c i2 server blades running HP-UX v3, HP StorageWorks Enterprise Virtual Arrays, HP StorageWorks XP24000 and P9500 disk array enterprise class storage systems, and HP Data Protector software for backup and recovery.

Need more proof that Latin America is a hotbed for IT outsourcing? IT outsourcing research firm Horses for Sources recently completed a comprehensive research study on the Latin American market. On its web site, the firm posted several key findings from their research, including a projection that the sourcing market in Latin America will grow from $21.6 billion in 2009 to about $35.6 billion in 2014.

The report notes that while most projects stick to application development work, there are opportunities for new remote infrastructure management offerings and service offerings that focus on niche areas of application expertise. HorsesforSources also says the Latin American region is a valid choice for any nearshore move, thanks to a thriving technology economy, competitive software development rates, demonstrable industry innovation, and vast human capital.