Among the veterans in the sector are thousands of companies specialized in meeting every aspect of a client’s information technology needs. These so-called “system integrators” often customize imported software for local applications, but they also install new PCs, maintain networks and train clients. They range from one-person consultancies to regional giants like Chile’s SONDA, which has nearly 2,000 employees and operates in 10 Latin American countries.

The Costa Rican initiative described on these pages is focused on a much smaller number of companies that develop proprietary, export-quality software products. Mexico, Brazil, Argentina and Chile dominate this category. Possibly the largest of these firms is Brazil’s Datasul, a 700-employee powerhouse in the field of custom enterprise management software that has branches in Argentina, Mexico, Portugal and the U.S. The fast-growing company recently landed a large investment from WestSphere Equity Investors, a North American private equity fund manager.

But by far the fastest-growing segment of the Latin software industry is the one related to Internet services and the World Wide Web. Companies that design and maintain home pages, offer Internet access services, or install electronic commerce systems are sprouting like mushrooms throughout the region, driven by the relentless growth of this medium.

The case of El Sitio is typical. Founded in Argentina in 1997, this Internet “portal” company now has 170 employees in half a dozen countries and $44 million in equity investments from U.S. firms. Other portal companies, like uol.com.br, yupi.com and quepasa.com are also establishing beachheads throughout the region.