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Latin American Managed Security Services Markets 2010
Frost & Sullivan, April 2011, Pages: 41
Influential market drivers of the Latin American MSS markets include the high number of network security regulations that companies are obligated to comply with, the excellent cost benefits of outsourcing network security, the increasing complexity of business networks, and the frequency and sophistication of network attacks. The market demand that was not met in 2009, due to the economic crisis, acted as a growth driver for the region in 2010. The market is composed of international and local IT service providers, telcos, pure MSS participants, and integrators.
Market Overview;
Need for Regulatory Compliance Uplifts Prospects for Latin American Managed Security Services Markets
The Latin American managed security services (MSS) markets had obtained high growth rates in 2010, reaching a total of $189.4 million. The most important market drivers include the economic growth of the region, excellent cost-benefit of outsourcing network security, the increasing complexity of business networks, and sophistication of network attacks. Compliance with local and international regulations has been a driver in the Latin American network security markets. Brazil and Colombia offer the highest growth potentials in the short term.
The market is composed of international and local IT service providers, telecommunication service providers, MSS pure participants and integrators. Although the enterprise segment is extremely participative of this market, a greater presence of the mid-market is expected already in the short term. “While regions such as North America and Eastern Europe are already witnessing a downtrend due to a more stabilized market, Latin America is presenting an extremely dynamic and fast-growing MSS market,” notes the analyst of this research service. “Global vendors have noticed this emerging opportunity and are investing on local security operations centers (SOCs), greater services flexibility, and marketing of their service capabilities.”
Lack of Awareness and High Costs Can Limit Market Potential
Although the prospects for the market look bright, there are some challenges restraining market progression. The lack of awareness about the current threats and the solutions available in the market are major factors deterring growth. Challenging economic conditions and political instability in many countries in the region are constraining overall IT investments. Above all, the price of MSS remains prohibitive for many potential clients, mostly in the mid-market segment.
Vertical Markets Experiencing Prolific Growth
Among the vertical markets, the telecommunication and manufacturing sectors have high investments in outsourced MSS, followed by the banking and finance segments. The government vertical is conducting a series of modernization and digital inclusion programs. In Brazil, all levels of government have invested heavily in outsourcing their IT departments. The retail vertical attained a market share of 10.8 percent in 2010 and is expected to increase its participation in the Latin American MSS markets to 12.2 percent by 2016.
A majority of MSS participants consider the retail vertical as one of the most strategic as companies in this segment have a greater desire to focus on their “core business” and are slated for aggressive growth. In addition, compliance to Payment Card Industry Data Security Standard (PCIDSS) has been a major market driver in this business vertical. “Other vertical markets poised to pick up steam are education, tourism, and healthcare,” says the analyst. “These verticals will experience prolific growth over the coming years, especially as they have only been investing to protect their networks over the past few years and have enormous growth potential.”
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