Growing up fast: Chile's Sonda looks to the stock market to finance big growth across Latin America.

Our dream is to be capable of competing on the same footing with companies the size of IBM or HP," says Mario Pavon, vice president at Chile's Sonda, a pioneer in software development in the region founded in 1974 in Santiago. A quarter century later, Sonda is indeed providing technology services across the region, and its annual revenues are north of US$300 million, with 3,000 employees.

Sonda wants a slice of the 8.5% growth that Latin American companies expect to see in info-tech. In 2004, spending reached $26.43 billion, according to U.S. consultancy IDC. Regional expansion is key for Sonda since the domestic market for its services last year generated just $1.06 billion, a figure that has been steady for the past eight years, according to a recent study by Chile's national chamber of commerce.

In the wider Latin American tech services market, Sonda is still far smaller than global giants like IBM, EDS, HP, Accenture and Unisys, which among them dominate the market from Mexico to Argentina at a 30% market share. Sonda competes for the remaining 70% of the business fragmented among domestic and regional competitors, says Ricardo Villate, enterprise solutions director for IDC Latin America.

Among those are Brazil's CPM--a joint venture of Brazilian banking giant Bradesco (49%) and Germany's Deutsche Bank (51%)--and Mexican tech services providers Neoris and Softtek. The former is a unit of Mexican cement company Cemex, with offices in the United States, Spain, Portugal, Argentina, Brazil, Chile, Mexico and Venezuela. Softtek, founded in 1982, has a presence in nine countries in Latin America and the United States, and its main business is software development.

Global focus has allowed Chilean high-tech to extend to 10 countries in the region through Sonda units in Argentina, Brazil, Colombia, Ecuador, Costa Bica, Mexico, Peru, Uruguay, Venezuela and from Sonda headquarters in Chile. Sonda's internationalization began in 1984, when the company headed north into Peru.

This year Sonda began a new phase of its expansion strategy, with the objective of creating a network that could offer regional services to its clients. "Many global companies in Latin America are thinking of being global providers," says Pavon. To achieve this, Sonda seeks to increase its relatively new presence in the region's biggest markets--in Brazil and Mexico--through acquisitions of companies that would complement its units in each.

No word on any pending deals, however. "It's a time-consuming process. Making a mistake has costs that are not easily ignored, so we would rather analyze things very closely," Pavon says. In Brazil, the Sonda unit Sondaimares is oriented toward support, counting among its clients Embraer, Citibank, Light, Telemar and McDonald's. Yet the unit has no significant business in systems integration. "This has been by far the most important business for Sonda, and we think that it represents a big growth opportunity in Brazil," Pavon says.

Betting on Chile's solid capital markets, Sonda expects to finance its expansion through a public share offering. "For 31 years we have been in an expansion process using our own internal resources, and now we want to accelerate that via acquisitions. We are beginning a strategic change, and we'll need more money," says Andres Navarro, founder and president of the company. Navarro says it is possible that the equity offering will be made this year.

Navarro and his family control a majority share in Sonda. The venture-capital fund of U.S. chip giant Intel and the International Finance Corporation (IFC), the private-sector arm of the World Bank, have minority holdings.

Unique. It was in July 2004 that the IFC decided to invest. "Sonda is a unique case, since its Chilean operations are larger than those of the multinationals, which doesn't happen in the rest of Latin America," says Carlos Botelho, manager of the technology investment portfolio of the IFC. In Mexico for instance, global giants such as HP and IBM have revenues on the order of $1 billion each, while three or four other domestic operators bill between $100 million and $200 million apiece, he says. Among those are Neoris and Softtek.

The difference, Botelho says, is that Sonda started earlier and grew along with its clients, the banks and pension funds, and, second, because most of the big Latin American technology services providers focus on just one slice of the tech market. "They are not tech supermarkets, like Sonda," he says.

The IFC can afford to relax for other reasons: In 2005, Sonda expects to see revenues rise 18%, to $340 million.

EDUARDO CORONADO * SANTIAGO