A small software outfit is likely to put Colombian programmers on the map,
ANDRtS F. VELAZQUEZ • CALI
ali, known for its salsa, women,
C
soccer and the domestic sugar
indtistry, is turning into a
miniature Silicon Valley. A tech incu-
bator begun in 2000 known as
Parquesoft, in which 1,400 young pro-
grammers toil in 300 software devel-
opment microbusinesses, Parquesoft
has not only sold US$29 million in
products since its founding but also
broke a paradigm in
SOFTWARE the process: It lets
young people with limited resources
partake in the global economy.
Parquesoft has 11 more regional oper-
ations in medium-sized Colombian
cities. The initiative is led by Orlando
Rincon, a successful 43-year-oId Cali
businessman who grew up modestly
and a leftist, now a software expert
and anthropologist who lives for
improving the quality of the lives of
less fortunate Colombians. Famous
for his simplicity. Rincon is only half-
kidding when he suggests that
Colombians, thanks to their heritage,
are genetically ideal for programming.
"The software industry is full of con-
tingencies and demands that you
think outside the reality you seem to
face." he says. "That allows us to use
the sneaky, indigenous part of our
genes to perceive or sniff out things
that aren't there, the African hunting
gene for the long journey that is this
work, to be persistent, and to have
patience that hunters have."
Parqesoft has become a permanent
stop for touring multinational execu-
tives and representatives of institu-
"Parquesoft does
not do assembly
work; it creates
intellectual property."
tions like the World Bank and Inter-
American Development Bank, among
others. "With my line of work, I come
across a lot of countries and initia-
tives, and 1 can say that this one in
particular is unique," says Martin
Taylor, platform strategy manager for
Microsoft.
One of the better-known companies
from Parquesoft is Manglar, a four-
employee outfit—two of which are in
Russia—that invented and patented
software that corrects distortion in a
projected image that arises when a
projector is poorly placed. According
to iSuppli/Stanford. a consultancy,
the worldwide market in 2006 for pro-
jectors will grow by 80% and in 2007 it
will hit $17.90 billion.
"This is a totally unique technology
that exists nowhere in the market
right now," says Dan Miller of
BizTank, an advisor to start-ups like
Manglar in Sarasota. Florida. "We
think there are many, multimillion-
dollar opportunities to license this
technology."
According to Lope Trujillo, the 38-
year-old head of Manglar, his compa-
ny realized that the worid needed this
kind of product thanks to Parquesoft.
"Japanese manufacturers have told us
they've been working on this for
years," he says. "For instance, NEC has
invested a lot in this and has achieved
something more or less the same, but
it requires hardware and raises the
price of the project by $ 1,000."
Mangiar has signed a deal with
IMG, a marketing company that rep-
resents athletes such as Swiss tennis
star Roger Federer, to negotiate an
exclusive deal with some of the
4/2006 LATIN TRADE 37
ONNECTION

l>iggest projector manufacturers. and electrical engineering.

According to Trujillo, by July there
should bf an agreemeni in hand. "We
think this project could generate
between $50 million and $100 million
through licensing," he says. "This
would make it Colombia's biggest
software export."
Other software businesses to come
out of Parquesoft include Immersion
Software, which from its start three
"This has been a positive change in
our lives and we suffered a lot to get
here because before we closed this
deal we were trying to close one with
investors [from the sugar industry]
that were very tough," says Galvez.
"We were looking for just $150,000" in
seed money.
In Latin America, Galvez says,
there's no clear culture of venture

STMFORD "Next year we're

capital and even less so in Colombia,
where software development is an
emerging industry. "When you talk to
Graduate School going to have more
investors about the projects, they get
really excited but then later they get
of Business scared and take a step back," he says.

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"It took us three years to achieve
something we could have done in six
months with the financing in place."
For now the objective at Parquesoft
is for all of the companies to post
combined sales of $100 million before
2008, says Kincon, who retired three
years ago after selling part of
OpenSystems. a software company
founded in 1987 in Cali, with 200
employees and revenue of $14 million.
"Next year we're going to have more
than 150 companies going into a very
aggressive phase," he says. "What hap-
pens is, the technology industries
take three years to stabilize a soft-
ware product, testing it in the market.
In the fourth year is when the rev-
enues really start to get interesting."
Rinc6n says that by then Parquesoft

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 STAY NECTED
The Parquesoft phenomenon, seen
from a political, anthropological and
cultural point of view is an answer
to India's software model, Rincon
says. "The Indian model consists of tO
to 12 Indians that are holding some
5 million of their countrymen hostage.
It's not possible to call this an indus-
Iry when one sells a month's work
lor $7,000 and pays the Indian engi-
neer $150." he says. "So our cultural
response is not three businessmen
making slaves of a thousand Colom-

"Parquesoft is
a national asset.
They are leading
a revolution."
bians but 500 entrepreneurs creating
their own small businesses. This
allows us to create business capacity
will luwv more than 400 companies and a politically thoughtful and demo-
with annual sales on average of cratically participatory model that is
$250,000. Considering they have on totally different."
average four employees, each one Rincon believes that, despite their
could be earning $60,000 a year. capabilities, history, culture and reli-
"That's incredibly easy," says Rincon gion keep Indians from standing out, Latin America's capitals are
with his characteristic ease. creatively. Yet the big opportunity in important business hubs: busy,
It's clear that Parquesoft's strategy the software industry is innovation, active, and often stressful. Luckily,
is one-of-a-kind. In the first place, "Today there are 3 million Indians your stay at Radisson will be Just
instead of branding each company, working to solve the basic problems the opposite. An opportunity to
the branding is done as Parquesoft, of the developed countries and this unwind in carefully crafted spaces
which makes for big savings. In addi- creates work but they are not the designed for mind, body and soul,
tion, many segments of the economy owners of those patents," he says. so on your next trip to central
rely on Parquesoft as a brand since "They are slaves to the intellectual
and South America, stay relaxed.
the incubator's companies serve many property of other countries. Parquesoft
Stay Radisson.
sectors, including health care, educa- does not conduct assembly work; it
tion, heavy industry, petrochemicals, creates intellectual property. The
scientific research, telecommunica- Indian model is slavish, medieval and
tions and government, among others. colonial."
Unconventional. Another peculiarity of The model has fans in California's
Parquesoft is that its businesses are Silicon Valley, including William HOTELS & RESORTS
focused on making lower-priced software. Musgrave Jr., President and CEO of LATIN AMERICA
www, rad I fion.com
"There's no need for costly sales processes The Enterprise Network, which pro-
since it's so specialized and there are so motes technology companies in the
few competitors," says Rincon. "We bet on famed U.S. tech hub. "I saw more cre- Bogota, Cati, Caracas, Tuatemala
making conventional software for very ativity in Colombia than I've seen in City, La Paz, Montevideo, Panama
unconventional businesses. Here you'll India," he says. "Parquesoft is a City, Quito, San Salvador, San Jose,
find no investment applications, nor soft- national asset. They are leading a rev- Santiago de Chile, Sao Paufo.

I
ware for inventories." olution." [S Nuevos Hotetes:
Antofagasta, Iquique (Chile)
y Colonia (Uruguay)