"I'm very impressed. The team is very impressive," says Rick Reidy, chief executive officer of Progress, a US business software company, of his Brazilian operation. Progress has packed out a conference suite of São Paulo's Sheraton Hotel with clients eager to hear about its plans for 2010. Brazil represents just 5 per cent of the company's revenue. But that's $25m, from just 20 staff. "It's growing rapidly. It's a green field. I don't want to call it an emerging market. It's beyond that," he says. "There is a whole cottage industry of companies out there." In the convention hall, reps from this "cottage industry" of new software houses bustle about. One of them is Vértice. "The company started this year. In six months we have doubled revenue and our team," says Gustavo Veiga, a salesman. Another is HTG, with 10 employees in Rio and 60 in São Paulo. Eduardo Molina, the company's new business manager says: "We are coming out of the crisis and people are looking for a new IT solution." Brazil is rapidly becoming a new world centre for IT and BPO, or Business Process Outsourcing. According to Brasscom (the Brazilian Association of Information Technology and Communication Companies), the country has the eighth largest IT-BPO market in the world. In 2008 it turned over $59.1bn. IT and communications account for 7 per cent of GDP. This is a high-tech, numerate country, even if piracy is a problem – pirated copies of Windows 7, complete with manuals in Portuguese, were on sale for R$10 on the day of its release. Tax returns and voting are done online. In 2008, according to IDC, a consultancy, the country was ranked fourth in global computer sales, behind only Japan, China and the US. And international software companies with Brazilian operations do not have problems finding the staff they need. "We found well-trained people," says Carlos Eres, managing director for Spain and Brazil at GFT, a German IT service provider. He is speaking from his Barcelona office with British counterpart Graham Underwood. The company has 1,100 staff working on projects all over the world. "[Brazil] is a perfect complement to our southern European centre. The time zone works and it gives me the costs I need," says Mr Underwood. "I've had experience working in India and [Brazil] is much less painful." The country has its own software giants too, like TOTVS of São Paulo. With 5,000 employees, a turnover in the past 12 months of R$1.05bn ($601m) and presence in 26 markets, it found a niche serving small to medium companies with business software at a price they could afford. "In Brazil, less than 7 per cent of small and medium companies have management software. The competition cannot reach this market as easily because they don't have the culture. We supply a basic product to an under-penetrated market with a lot of needs," says José Rogério Luiz, finance and investor relations director. IT growth, he says, has been helped by the population's innate sense of can-do and hustle – often described as the jetinho brasileiro, the "Brazilian way". "If you go to India, you have service providers. In Brazil, we learnt to build the whole solution. We build software."

The country's IT entrepreneurs had ambition and they got in early. BuscaPé, an online commerce site, was started by four students in a bedroom in 1998, each of whom put R$100 a month into the business. They broke even in 2002. By 2008, the site had 50m visitors a month and turned over R$3.8bn in the first half of 2009. In September, it was sold for $342m to Naspers, an African media group.

"In other countries, these sites were successful in a mature market. We were there just as the business was beginning," says Romero Rodrigues, company president.

Brazil has some infrastructure problems. In São Paulo, the main internet network, run by Telefónica of Spain, has experienced four big interruptions this year alone. In July, Telefónica was temporarily banned from selling new customer contracts by Anatel, Brazil's telecommunications regulator. Companies say they can find qualified staff, but that extra training is sometimes needed. "The world is finally catching up to the fact that there is a highly qualified group of engineers in Brazil," says Marcelo Condé, whose mobile software company Spring Wireless has expanded globally from Brazil with expected sales for 2009 of $130m and clients as diverse as L'Oreal and Banco Real.

The company sources staff from universities such as the University of São Paulo and Unicamp, but also spends time and money training staff. "What we do is very innovative, so you can't find people coming out of school who are trained in what we do."

TOTVS sponsors the NGO Instituto da Oportunidade Social and trains up to 1,500 youngsters from poorer countries in technology, says Mr Luiz. "After that we recruit them ourselves or to some of our 20,000 clients."

The government wants the country to become one of the world's top three IT centres and aims in 2010 to boost IT-BPO exports from $2.2 bn to $3.5 bn. The problem, says Mr Condé at Spring Wireless, will be finding the staff to match that growth.

"We're probably moving towards a very solid next 20 years for Brazil," he says. "Making sure you get those guys right is critical."