December 2002

Silicon Valley South

Belo Horizonte entrepreneurs are part of a movement to wean
Brazil's computers from dependence on imported software,
especially Microsoft products. Projeto Libertas is working
to convert the municipal government's 5000
computers from Windows to Linux.

Ted Goertzel

Belo Horizonte, Brazil's third largest city, is usually overlooked by tourists unless they pass through on their way to the colonial towns of Ouro Preto or Diamantina. Belo is the capital of a state whose founders were so lacking in lyrical inspiration they simply named it "General Mining" (Minas Gerais). The beautiful horizon for which the city is decorously named is mostly hidden from downtown viewers by nondescript office buildings. The city did have a brief moment of fame in the 1960s when climatologists announced that it was the best place on the planet to escape from nuclear fallout in case of a war between the United States and the Soviet Union.

Despite this less than promising history, Belo Horizonte has become one of Brazil's two leading centers of cutting-edge computer science entrepreneurialism. The other is Recife, capital of the impoverished northeastern state of Pernambuco. Why have these two regional centers taken the lead instead of the major industrial centers of São Paulo and Rio de Janeiro? In both cases, entrepreneurial professors at the local federal university campuses spearheaded the industry.

In Recife, Professor Silvio Meira, of the Federal University of Pernambuco, played a key role, while a key innovator in Belo Horizonte was Professor Nivio Ziviani of the Federal University of Minas Gerais. Both of these innovators created non-profit organizations with links to their universities as incubators for early development projects.

Professor Meira is president of the Center for Studies of Advanced Systems in Recife (CESAR), and vice-president of the Radix search engine company. Professor Ziviani developed the MINER family of search engines including Book Miner, CD Miner and Law Miner. The MINER acronym has a double meaning, referring both to Minas Gerais, the mining state, and to data mining.

He sold the Miner software to a leading Brazilian portal,, for an undisclosed but substantial sum of money. Together with local businesspeople, he founded Akwan Technologies, an information technology firm that creates specialized search engines for businesses, institutions, WEB portals and other WEB users.M The Federal University of Minas Gerais is a business partner of Akwan, under new Brazilian legislation that allows universities to profit from business ventures.

The Computer Sciences Department at the Federal University of Minas Gerais offers formal classes in entrepreneurialism. They also formed an incubator called INSOFT-BH (Incubadora de Empresas de Base Tecnológica em Informática), as part of an established federal government hi-tech program, to provide starter support for student enterprises. Enterprises currently in incubation at INSOFT-BH include anti-pirating software, software for Medical Laboratories, web-site development, banking software and software for keeping Brazilian tax records.

Companies that have already become independent make software for plotting topographic maps for miners, writing business plan software, scheduling school classes, and on-line merchandising. INSOFT-BH funded Anibal Camara and Bruno Junqueira in 1993-1996, just after their graduation from the university program. They developed programs for planning transportation routes and won contracts with several Brazilian corporations. In 1999 their company, AdHoc, finished its incubation period and opened independent offices. They have eighteen clients in five Brazilian states.

Federal University student Cassio Pennachin began his business career when he answered an online job ad from a New York firm, Webmind, Inc. Webmind wasn't looking for an overseas programmer, but Cassio offered to work free for a week to prove what he could do. Webmind sent him a difficult Java problem to solve, and his solution was so impressive they immediately hired him. After a few months on the job, he volunteered to recruit other Belo Horizonte programmers.

Soon Webmind had 60 programmers working in its Belo Horizonte branch under Cassio's supervision, doing cutting-edge programming and artificial intelligence research at significantly lower cost than in New York. When the Internet bubble burst and Webmind New York closed, Cassio joined forces with other "Webmind Diehards," André Senna and Thiago Maia, to start their own company, Vetta Technologies. VettaTech is one of the first Brazilian firms to tap into the global trend for outsourcing computer programming to third world countries where labor costs are lower.

Although VettaTech pays its programmers very well by local standards, the costs are still significantly lower than in the United States and Western Europe. Today, outsourcing is done in a number of countries including India, Singapore, Russia, and Ukraine where highly talented programmers can be hired at a fraction of United States costs. Brazil offers significant advantages for outsourcing because it has a stable political and financial climate, fast and reliable network connections, and a Western culture that makes communication easier.

VettaTech also markets its services to Brazilian corporations, with a specialization in sophisticated statistical models of industrial processes. This software must be attuned to each company's individual needs, and VettaTech consultants must be sensitive to the entrepreneurial culture of their clients and their business methods and priorities, as well as to their technical priorities. Belo Horizonte's entrepreneurial spirit is as important to their success as their technical wizardry.

Belo Horizonte entrepreneurs are also part of a movement to wean Brazil's computers from dependence on imported software, especially expensive Microsoft products. This is particularly important now that Brazil's currency, the real, is hitting all-time lows, which makes imports too expensive for many Brazilian users. The Open Office project, with Brazilian headquarters in Porto Alegre and an active group in Belo Horizonte, offers free office suite software compatible with Microsoft's Portuguese-language products.

In Belo Horizonte, Projeto Libertas is working to convert the municipal government's 5000 personal computers from Windows to Linux, cutting the need for expensive software updates and new hardware. Many Brazilian offices still make use of 100 megahertz Pentium machines, so there is a premium on software that gets the most from older equipment.

Whatever Brazil's future may bring in terms of financial instability and changing political policies, Belo Horizonte's high-technology entrepreneurs are up to the challenge.

Ted Goertzel, Ph.D. — —  is Professor of Sociology at Rutgers University in New Jersey

Links to Belo Horizonte groups mentioned in the story:

Akwan Technologies:

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