Section 14.2. Background for Freedom: The Market


14.2. Background for Freedom: The Market

Like many countries, Brazil has a tradition of aiming for independence and sovereignty in strategic markets. This brought excellent results in many areas, from oil extraction (today Brazil produces almost 100% of the oil it consumes), pharmaceuticals, energy, and also technology. Software development is seen as very strategic; in fact, the country's domestic development market is larger than India's export market. Unfavorable currency conversion means that software from outside companies, priced in dollars or euros, is usually much more expensive than similar solutions developed in-house or acquired from local companies. Also, because of a unique, complex tax system, much of the existing commercial software is not suitable to run in the country. Add this complexity to the low buying capacity of small and medium-size companies`, and you see why Brazil is not favored by international companies as one of the targets for software customization or translation. For commercial software, it is common to feature Portugal Portuguese translations over Brazilian Portuguese translations, even though Portugal has only about 5% of Brazil's population.

The Brazilian government develops large, countrywide solutions, mostly tailored to the needs of the poor, large, and dispersed population. The sheer size of those systems is enough to make the government the single largest buyer of software and the focus and target of most software companies, especially infrastructure software vendors. Moreover, extremely high inflation existed for many years, having been controlled only in the last decadebut not before it pushed the banking industry to invest heavily in technology, putting Brazilian banks among the most technologically advanced in the world. Because of specific legislation and finance standards, banks are also some of the largest investors in software development.

For historical reasons, Microsoft and IBM hold strong positions in this market, both in government and in private companies. Oracle is by far the largest database vendor. Custom software developed to run on those companies' platforms is a large legacy, which is used to justify most large expenditures in software; the result is an effective lock-in that is extremely hard to break. With the large amount of custom development, what mainly prevents vendor choice in Brazil are the government custom-developed, single-vendor solutions. Especially in the 1980s and early 1990s, when the country had rigid policies disallowing hardware imports, there was huge promotion of software product adoption, mainly in education. These included incentiveseither explicit or unofficially hinted atto use unlicensed copies, and donation of software to universities and schools at all levels. This created a large legacy of knowledge. Many use only Microsfot Windows and Office and don't consider any other options. The comparison of this strategy to that of drug dealers, who offer the first dose for free, was what recently made Microsoft sue a leading software livre activist.

Many older PCs still automate supermarkets, bank branches, and public offices and agencies. Many of those are doing their jobs perfectly running older versions of Windows, but Microsoft is pushing for software upgrades and more licensing. The lack of options has forced many companies to spend their budget on licenses for new OS versions, and on new computers able to run the new OSesall just to be able to run the same preexisting applications.



Open Sources 2.0
Open Sources 2.0: The Continuing Evolution
ISBN: 0596008023
EAN: 2147483647
Year: 2004
Pages: 217

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