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Cablegate: “42 Percent of Argentine Firms Use Linux on at Least Some of Their Computers”

Posted in America, GNU/Linux at 3:54 am by Dr. Roy Schestowitz


Summary: In a cable marked “sensitive”, US diplomats look at the digital state which Argentina is in

TECHRIGHTS covered Argentina several times over the years. Argentina, being a south American nation, has been quite GNU/Linux-friendly. Here are some posts that may be relevant to today’s Cablegate cable on “BRIDGING ARGENTINA’S DIGITAL DIVIDE”:

According to the following cable (¶11), “Linux is popular in Argentina due to its low cost, and 42 percent of Argentine firms use Linux on at least some of their computers.” Here is the cable in full:

DE RUEHBU #0748/01 0901858
R 311858Z MAR 06

E.O. 12958: N/A
TAGS: ECON [Economic Conditions], EIND [Industry and Manufacturing], AR [Argentina]
¶1. (U) Sensitive but unclassified. Not for Internet
¶2.  (U) Argentina's IT industry is the third largest in
Latin America. Argentina's IT industry enjoys many
advantages and is growing quickly. IT companies expect
continued rapid growth and are investing heavily in
Argentina. There has been a boom in the number of small
U.S. hardware and software companies in Argentina in the
past two years. The growth in Argentina's IT industry has
left many Argentines behind. The GOA has instituted a
number of projects with mixed results to combat this digital
divide. Private companies are also sponsoring programs to
bridge the digital divide, and strong competition in both
the hardware and software sectors is driving prices down.
The private sector will likely prove more able than the GOA
to bridge Argentina's digital divide. End summary.
¶3.  (SBU) Argentina's IT industry is the third largest in
Latin America. Total IT production amounted to USD 1.3
billion in 2005, of which USD 250 million were exports. The
IT industry is responsible for one percent of Argentine GDP,
and employs over 48,000 Argentines, or 1.44 percent of the
total labor force. The largest IT consumers within
Argentina are the financial, government, telecom, oil, and
manufacturing industries. IBM, which is the largest IT
company in Argentina in terms of both sales and employment,
has 3,500 Argentine employees. IBM and EDS provide services
to many Latin American clients from Argentina. Intel will
soon begin its first production in South America with a
software development facility in Cordoba. Microsoft
maintains a presence in Argentina only for public relations
and marketing purposes. Smaller domestic and foreign firms
produce software, hardware, and services for mostly local
Rapid Growth
¶4.  (U) Argentina's IT industry enjoys many advantages.
Argentine workers are comparatively well educated. Since
the 2002 devaluation of the peso, Argentine skilled labor
has been competitively priced. The relatively large
domestic market allows firms to gain experience in the local
market before exporting, while the predominance of the
Spanish language gives Argentine companies access to
important export markets.
¶5.  (U) Argentina's IT sector is growing quickly. IT grew
29.3 percent in 2005, roughly triple the rate of the
Argentine economy as a whole, and generated 20,000 new jobs.
Domestic and export sales contributed equally to this growth
as exports increased 30 percent in 2005. Revenues from
hardware grew 37.6 percent, while revenues from software
grew 22 percent and revenues from services grew 20 percent
in 2005.
¶6.  (SBU) IT companies expect continued rapid growth and are
investing heavily in Argentina. IBM added 750 employees in
2005 and expects to add 500 employees per year over the next
four years. IBM would like to double this number of new
employees, but it is limited by the number of qualified
graduates, its ability to develop new managers to supervise
these new employees, and available office space. IBM is
currently looking for a local company to build and lease a
BUENOS AIR 00000748 002 OF 003
large new office building to house its new employees. Intel
recently began work on a multimillion-dollar facility in
Cordoba for 450 employees.
Explosive Growth of Small U.S. Companies
¶7.  (U) There has been a boom in the number of small U.S.
hardware and software companies in the Buenos Aires
neighborhoods of Palermo, Palermo Chico and Palermo
Hollywood during the past two years, according to industry
sources. Most of the firms are subsidiaries of U.S.
companies that are based in Silicon Valley, California,
Austin, Texas, and Raleigh, North Carolina. They generally
employ 50 to 100 people and maintain a relatively low
profile. This expansion is also being felt in the
provinces. For example, a government official in the
province of Salta recently told the Economic Counselor about
a former Argentine employee of a U.S. software company who
now operates a company in Salta providing software for U.S.
companies. This is one of several such companies in that
province. U.S. firms move operations or outsource to
Argentina to take advantage of Argentina's relatively high
educational levels and low labor costs.
Digital Divide
¶8.  (U) The rapid growth in Argentina's IT industry has left
many Argentines behind. The population of Internet users
grew 40 percent in 2005, but computer use in Argentina is
still limited to the middle and upper classes. Only ten
million Argentines, or roughly a fourth of the population,
have regular access to the Internet. The vast majority of
these computer users are concentrated in the nation's
largest cities, according to a survey by Microsoft.
Approximately 20 percent of the population does not have an
equal opportunity to access the Internet because broadband
has not reached their poorer neighborhoods.
¶9.  (U) The GOA has instituted a number of projects with
mixed results to combat this digital divide. Argentina's
Ministry of Education together with the Massachusetts
Institute of Technology launched "One Laptop Per Child" in
2005. This program intends to distribute between 500,000
and 1 million low-cost laptops to poor children in
Argentina. Another Ministry of Education plan launched in
2005 intends to distribute 100,000 computers to 12,000
schools. The GOA also partly revived a plan to establish
Community Technological Centers (CTCs) after abandoning it
during the recession of 1999-2002. There are now 1,350 CTCs
in Argentina. A lack of funding and training hampers these
programs, according to the director of the Argentine
Telework Association and the director of projects for the
educ.ar program. An estimated 71 percent of Argentine
educators have never used the Internet, and only 3 percent
of Argentine Internet users regularly access the Internet
from an educational institution. By contrast, 60 percent of
Internet users go online in cybercafs, 41 percent go online
at home, and 14 percent go online at work, with many having
more than one mode of Internet access.
¶10.  (U) Private companies are also sponsoring programs to
bridge the digital divide. The "My PC Program," jointly
funded by 40 mostly Argentine firms, is designed to bridge
the digital divide by providing low-cost PCs to the nation's
poor. Seven of the eight largest supporters are U.S. firms,
including Intel, Microsoft, and HP. The eighth firm is
South Korean. The program sold more than 20,000 PCs for
approximately USD 800 per unit in April 2005. Other
programs, such as Intel's "Quality in Teaching" program and
BUENOS AIR 00000748 003 OF 003
Microsoft's "Alliance for Education Program" are also
bringing Internet access to the nation's poor.
¶11.  (U) Strong competition in both the hardware and
software sectors is driving prices down. The hardware
market in Argentina is extremely competitive and offers low
profit margins. The number of PC manufacturers with sales
and service networks in Argentina has increased from four to
17 in recent years. The software market is also
competitive. Linux is popular in Argentina due to its low
cost, and 42 percent of Argentine firms use Linux on at
least some of their computers. Microsoft released a Spanish-
language Windows XP "starter edition" to compete with Linux,
further reducing the cost of a new Internet-ready PC. The
impact of this competition is clear. Sales of PCs for home
use increased 93 percent to reach over one million units in
¶12. (U) The results of GOA programs to bridge the digital
divide have so far been disappointing. The private sector
will likely prove more successful in this area. End
¶13. (U) To see more Buenos Aires reporting, visit our
classified website at:


A 2009 survey in Italy showed that OpenOffice.org usage in the country is 50% among companies, with GNU/Linux at 63%. Just how understated is the impact of Free software as viewed from the States? A lot of the English-speaking news comes from there, pushing aside other claims and measurements, thus establishing a biased consensus.

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  1. Michael said,

    September 9, 2011 at 4:32 am


    “A 2009 survey in Italy showed that OpenOffice.org usage in the country is 50% among companies, with GNU/Linux at 63%. ”

    Wait: are you saying OO.o was found to be used as much as MS Office or just used *some* in half the organizations? And are you saying Linux is used on the desktop 63% of the time or that it is used *some* in that percent of businesses.

    I suspect the lower but you portray it as if it was the higher.

    NotZed Reply:

    He’s saying something, but your demonstrated lack of ability to comprehend the written English language is simply letting you down. Again.

    I would feel sorry for you …

    Michael Reply:

    Clearly you have no idea. Why do you try to start flame wars here?

  2. Needs Sunlight said,

    September 9, 2011 at 5:32 am


    A lot of FOSS use is understated because the English-speaking media stops covering regions and activities once they go FOSS.

  3. mcinsand said,

    September 9, 2011 at 11:38 am


    Something in this article knocked a few cobwebs loose, and this might be semi-off-topic. In 2003, however, Sam’s Club in the US was offering really inexpensive desktop computers with Debian preloaded. These quietly disappeared, though, a year or so later when I was finally disgusted enough with XP to make the jump. Anyone know anything about those offerings?

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