Microsoft invests $100m in Brazil with new technology center

Summary:The software giant is following others into the Latin American region, like Lenovo and Amazon, as the country becomes a new powerhouse for the technology industry.

Microsoft is investing around $100 million in Rio de Janeiro over the next four years by expanding its reach into the market with a new technology center.

First reported by Brazilian newspaper Agência Estado, the new technology center will receive funding from the Brazilian federal government, though much of the investment will come from Microsoft's coffers directly. It comes only a few months after the software giant invested around $5 million in its Sao Paulo office earlier this year to get a head-start on bringing its technologies and products to the wider Latin American market.

After a year of negotiations with the country's authorities, the deal is expected to be announced later today.

According to The Next Web, it comes a year after Microsoft said it would start manufacturing its Xbox 360 console in the region with a significantly lower price tag, allowing the company to push aggressively in the games console market in the country.

But now the company is pushing further in a bid to cover even more ground in the country, where the economy remains tight but has brewing potential. It follows a confirmed move by Lenovo, and rumors that Amazon may also join in the race to ramp up competition in the region. 

Lenovo, for example, began work on proposals to bring a PC manufacturing base to Brazil, not only to help the local economy and drive prices down on its products with lower local taxes and employing local staff, but also as a distribution hub for the widely untapped market.

Brazil is seen as one of the emerging powerhouses in the technology world, with many major technology firms pushing for a way in to the lucrative Latin American market.

Above all else, it's the population factor. Brazil may not have the strongest of economies, and has a significant division between the extremely rich and the shanty, favela towns, the country still has close to 200 million citizens that remains an uncracked market by many Western technology companies. 

In many Latin American areas, consumer demand is expected to rise as PC sales build from the ground up. In many countries in the developing continent, many consumers have yet to buy their first PC, for instance. 

But it's hoped that increased investment in the region earlier rather than later can help major technology companies get a headstart over their rivals. While Brazil is at the bottom of the ladder moving up slowly, it could soon become the next powerhouse of the technology world in the Latin American region, just as the U.S. is to North America, the U.K. is to Europe, and China is to Asia.

Image credit: Microsoft.

Topics: Microsoft, Amazon, Emerging Tech, Lenovo, Software

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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