Magma plans 1Q04 start for Brazil, Chile ops

Uruguayan software developer Magma expects to begin selling its products in Brazil and Chile in early 2004, after signing distribution agreements with companies in both countries two months ago, company president Javier Beathyate told BNamericas. Magma joined forces with local consultancies Grow and South Consulting for Brazil and Chile, respectively, Beathyate said. Fellow Uruguayan software company iNet will be responsible for training staff at Grow, while Magma will train South Consulting's staff directly, he said. Grow will focus on Sao Paulo and Rio de Janeiro, while South Consulting will concentrate in Santiago, Beathyate said. These foreign ventures represent Magma's first move abroad since it opened operations in Argentina in 1992, he said. Argentina today accounts for 80% of revenues, and it was the severe shock of Argentina's currency devaluation that encouraged Magma to expand to other countries, he said. The huge exposure to Argentina meant Magma's revenues in US dollar terms fell by almost two-thirds to US$600,000 in 2002, despite keeping local currency sales stable. That figure was down from US$1.4mn in 2001, he said. For 2003 the company looks to improve its revenues to around US$700,000, he said, adding he could not project what impact the expansion will have on 2004 sales. Next year should be a signature year for Magma's professional services administration (PSA) solution, MagmaPSA, which is similar to enterprise resource planning (ERP) software but is designed to measure services rather than products, Beathyate said. Clients of MagmaPSA include consultancies, legal, accounting and notary firms, project-administrator companies and IT services companies, he added. The company also has a standard ERP product, but it is coming under competition from Microsoft's Great Plains and Solomon solutions, which are beginning to make their way in to the region, he said. Rather than go head-to-head against Microsoft in the ERP arena, Magma is shifting its focus to the PSA product, he said, adding that in Brazil and Chile it will only sell MagmaPSA. As a result, the sales of that product should rise to about 60% of total revenues in 2004, compared to 30% this year, he said. Magma will not surrender the ERP market entirely, Beathyate said. The company is currently developing a new product for academic institutions that will combine ERP functions along with a communications portal for students and professors, he said. Another priority for Magma is to migrate its solutions to Microsoft's .NET programming language, he said, adding the company should complete the process by July next year.