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●● Cablegate: “42 Percent of Argentine Firms Use Linux on at Least Some of Their Computers”

Posted in America, GNU/Linux at 3:54 am by Dr. Roy Schestowitz

Summary: In a cable marked “sensitive”, US diplomats look at the digital state which Argentina is in

TECHRIGHTS covered Argentina several times over the years. Argentina, being a south American nation, has been quite GNU/Linux-friendly. Here are some posts that may be relevant to today’s Cablegate cable on “BRIDGING ARGENTINA’S DIGITAL DIVIDE”:

Report: Microsoft May be Fined 300,000,000 Pesos (~€55 Million) for Illegally Removing GNU/Linux as OptionMicrosoft Shoots Down Stallman’s Public Speech in Argentina — ClaimMicrosoft Scandal Versus GNU/Linux in Argentina, Legal Case Further ConfirmedMicrosoft Tries to Purge Software Freedom in America (Panama and Argentina)

According to the following cable (¶11), “Linux is popular in Argentina due to its low cost, and 42 percent of Argentine firms use Linux on at least some of their computers.” Here is the cable in full:

TO RUEHC/SECSTATE WASHDC 4016

INFO RUEHAC/AMEMBASSY ASUNCION 5452

RUEHBR/AMEMBASSY BRASILIA 5254

RUEHCV/AMEMBASSY CARACAS 0887

RUEHLP/AMEMBASSY LA PAZ 4068

RUEHMN/AMEMBASSY MONTEVIDEO 5453

RUEHSG/AMEMBASSY SANTIAGO 5058

RUEHSJ/AMEMBASSY SAN JOSE 0428

RUEHRG/AMCONSUL RECIFE 0137

RUEHRI/AMCONSUL RIO DE JANEIRO 1940

RUEHSO/AMCONSUL SAO PAULO 2842

RUEATRS/DEPT OF TREASURY WASHDC

RHMFISS/HQ USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 03 BUENOS AIRES 000748

SOUTHCOM FOR POLAD AND J5 FOR JUAN RENTA

USDOC FOR 4322/MAC/OLAC/BASTIAN/PEACHER

TAGS: ECON [Economic Conditions], EIND [Industry and Manufacturing], AR [Argentina]

SUBJECT: BRIDGING ARGENTINA'S DIGITAL DIVIDE

¶1. (U) Sensitive but unclassified. Not for Internet

¶2. (U) Argentina's IT industry is the third largest in

Latin America. Argentina's IT industry enjoys many

advantages and is growing quickly. IT companies expect

continued rapid growth and are investing heavily in

Argentina. There has been a boom in the number of small

U.S. hardware and software companies in Argentina in the

past two years. The growth in Argentina's IT industry has

left many Argentines behind. The GOA has instituted a

number of projects with mixed results to combat this digital

divide. Private companies are also sponsoring programs to

bridge the digital divide, and strong competition in both

the hardware and software sectors is driving prices down.

The private sector will likely prove more able than the GOA

to bridge Argentina's digital divide. End summary.

¶3. (SBU) Argentina's IT industry is the third largest in

Latin America. Total IT production amounted to USD 1.3

billion in 2005, of which USD 250 million were exports. The

IT industry is responsible for one percent of Argentine GDP,

and employs over 48,000 Argentines, or 1.44 percent of the

total labor force. The largest IT consumers within

Argentina are the financial, government, telecom, oil, and

manufacturing industries. IBM, which is the largest IT

company in Argentina in terms of both sales and employment,

has 3,500 Argentine employees. IBM and EDS provide services

to many Latin American clients from Argentina. Intel will

soon begin its first production in South America with a

software development facility in Cordoba. Microsoft

maintains a presence in Argentina only for public relations

and marketing purposes. Smaller domestic and foreign firms

produce software, hardware, and services for mostly local

¶4. (U) Argentina's IT industry enjoys many advantages.

Argentine workers are comparatively well educated. Since

the 2002 devaluation of the peso, Argentine skilled labor

has been competitively priced. The relatively large

domestic market allows firms to gain experience in the local

market before exporting, while the predominance of the

Spanish language gives Argentine companies access to

¶5. (U) Argentina's IT sector is growing quickly. IT grew

29.3 percent in 2005, roughly triple the rate of the

Argentine economy as a whole, and generated 20,000 new jobs.

Domestic and export sales contributed equally to this growth

as exports increased 30 percent in 2005. Revenues from

hardware grew 37.6 percent, while revenues from software

grew 22 percent and revenues from services grew 20 percent

¶6. (SBU) IT companies expect continued rapid growth and are

investing heavily in Argentina. IBM added 750 employees in

2005 and expects to add 500 employees per year over the next

four years. IBM would like to double this number of new

employees, but it is limited by the number of qualified

graduates, its ability to develop new managers to supervise

these new employees, and available office space. IBM is

currently looking for a local company to build and lease a

BUENOS AIR 00000748 002 OF 003

large new office building to house its new employees. Intel

recently began work on a multimillion-dollar facility in

----------------------------------------

Explosive Growth of Small U.S. Companies

----------------------------------------

¶7. (U) There has been a boom in the number of small U.S.

hardware and software companies in the Buenos Aires

neighborhoods of Palermo, Palermo Chico and Palermo

Hollywood during the past two years, according to industry

sources. Most of the firms are subsidiaries of U.S.

companies that are based in Silicon Valley, California,

Austin, Texas, and Raleigh, North Carolina. They generally

employ 50 to 100 people and maintain a relatively low

profile. This expansion is also being felt in the

provinces. For example, a government official in the

province of Salta recently told the Economic Counselor about

a former Argentine employee of a U.S. software company who

now operates a company in Salta providing software for U.S.

companies. This is one of several such companies in that

province. U.S. firms move operations or outsource to

Argentina to take advantage of Argentina's relatively high

educational levels and low labor costs.

¶8. (U) The rapid growth in Argentina's IT industry has left

many Argentines behind. The population of Internet users

grew 40 percent in 2005, but computer use in Argentina is

still limited to the middle and upper classes. Only ten

million Argentines, or roughly a fourth of the population,

have regular access to the Internet. The vast majority of

these computer users are concentrated in the nation's

largest cities, according to a survey by Microsoft.

Approximately 20 percent of the population does not have an

equal opportunity to access the Internet because broadband

has not reached their poorer neighborhoods.

¶9. (U) The GOA has instituted a number of projects with

mixed results to combat this digital divide. Argentina's

Ministry of Education together with the Massachusetts

Institute of Technology launched "One Laptop Per Child" in

2005. This program intends to distribute between 500,000

and 1 million low-cost laptops to poor children in

Argentina. Another Ministry of Education plan launched in

2005 intends to distribute 100,000 computers to 12,000

schools. The GOA also partly revived a plan to establish

Community Technological Centers (CTCs) after abandoning it

during the recession of 1999-2002. There are now 1,350 CTCs

in Argentina. A lack of funding and training hampers these

programs, according to the director of the Argentine

Telework Association and the director of projects for the

educ.ar program. An estimated 71 percent of Argentine

educators have never used the Internet, and only 3 percent

of Argentine Internet users regularly access the Internet

from an educational institution. By contrast, 60 percent of

Internet users go online in cybercafs, 41 percent go online

at home, and 14 percent go online at work, with many having

more than one mode of Internet access.

¶10. (U) Private companies are also sponsoring programs to

bridge the digital divide. The "My PC Program," jointly

funded by 40 mostly Argentine firms, is designed to bridge

the digital divide by providing low-cost PCs to the nation's

poor. Seven of the eight largest supporters are U.S. firms,

including Intel, Microsoft, and HP. The eighth firm is

South Korean. The program sold more than 20,000 PCs for

approximately USD 800 per unit in April 2005. Other

programs, such as Intel's "Quality in Teaching" program and

BUENOS AIR 00000748 003 OF 003

Microsoft's "Alliance for Education Program" are also

bringing Internet access to the nation's poor.

¶11. (U) Strong competition in both the hardware and

software sectors is driving prices down. The hardware

market in Argentina is extremely competitive and offers low

profit margins. The number of PC manufacturers with sales

and service networks in Argentina has increased from four to

17 in recent years. The software market is also

competitive. Linux is popular in Argentina due to its low

cost, and 42 percent of Argentine firms use Linux on at

least some of their computers. Microsoft released a Spanish-

language Windows XP "starter edition" to compete with Linux,

further reducing the cost of a new Internet-ready PC. The

impact of this competition is clear. Sales of PCs for home

use increased 93 percent to reach over one million units in

¶12. (U) The results of GOA programs to bridge the digital

divide have so far been disappointing. The private sector

will likely prove more successful in this area. End

¶13. (U) To see more Buenos Aires reporting, visit our

http://www.state.sgov.gov/p/wha/buenosaires

A 2009 survey in Italy showed that OpenOffice.org usage in the country is 50% among companies, with GNU/Linux at 63%. Just how understated is the impact of Free software as viewed from the States? A lot of the English-speaking news comes from there, pushing aside other claims and measurements, thus establishing a biased consensus. █

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● 09.09.11

●● Cablegate: “42 Percent of Argentine Firms Use Linux on at Least Some of Their Computers”