IBM, based in Armonk, N.Y, is targeting major banks, retail chains and government entities, which it initially hopes will be receptive to using Linux in so-called "fixed-function areas," such as ATMs and point of sale systems, Peter Nielsen, director of Linux strategy for IBM's global services group, said.
Brazil is the first emerging market to show enough demand for Linux to warrant a formalized offering for that country, Nielsen said. IBM will offer hardware, software and services tailored to the targeted industries.
"We've done enough installations in Brazil to have a good idea of what works on Linux," Nielsen said.
One of IBM's early customers is Casa Bahia SA, a large retail chain that's using Linux for its point-of-sale system.
Besides Brazil, IBM hopes to launch similar efforts in other emerging markets, including China, India and Russia, Nielsen said.
Some analysts weren't surprised by IBM's move into Brazil. "It's one of the most promising countries for Linux," George Weiss, analyst for market researcher Gartner, said.
Many emerging markets like Brazil are looking for alternatives to Microsoft's Windows software to avoid becoming dependent on a single U.S. vendor. In addition, many countries believe open source software like Linux, which is available for free, can help boost local software developers who won't need to pay licensing fees.
Despite the political issues around the use of Linux, it's uncertain whether new companies in emerging markets will be able to build a large business on top of open source software, Weiss said.
"Whether open source will be more profitable (than Windows) remains to be seen," Weiss said. "It could be less profitable."
A lot will depend on Microsoft's success in marketing Windows software in emerging markets, and whether it can capitalize on the success it has had in mature markets where the company holds a monopoly on the desktop.
New companies trying to build a business on Linux in developing nations will have to prove they can operate profitably long term, Weiss said. In addition, the number of companies building a business around open source will have to grow.