Strategic Assesment of Semiconductor Intellectual Property (SIP) Business Models

Economic Recovery Signals Market Revival

Although the Latin American network security markets suffered as a consequence of the regional economic crisis in the early part of the decade, the economic recovery since 2003 has revived investment in the IT sector. Latin American companies are also slowly becoming aware of the dangers of security breaches and investments in network security are seeing a resultant growth. Hence, sensing the emerging opportunities, global network security vendors are investing on improving sales partnerships in the region as well as operating local offices to provide clients with product support services.

This Frost & Sullivan research service is an analysis of the Latin American network security markets. It analyses the network security market for each sub region in Latin America, providing insightful information into market trends and key drivers. Moreover, it also focuses on specific network solutions such as firewalls, virtual private network (VPN), and intrusion detection system/intrusion prevention system (IDS/IPS).

Increasing Vulnerability of Networks Drives Market Growth

Among the main drivers ensuring growth in the Latin American network security markets is the increasing vulnerability of IT networks and the gap between demand and the capabilities of the vendors’ security solutions. With the advent of globalization, attacks are spreading faster on the global level and some regions such as Brazil and Mexico are already in a leading stage of network security awareness and development. Also, with IT infrastructure becoming more complex, the need for complete and robust solutions is contributing to the uptake of novel security solutions.

"Another key driver helping growth rates in the short term is the pressure exerted by regulatory acts, such as Sarbanes Oxley, which are pushing companies to increase their investments in security, particularly in the financial sector," says the analyst of this research service. "With small and medium companies beginning to invest in security, bundled solutions that integrate multiple security solutions as a single product are beginning to grow in popularity."

Growing Shift from IDS to IPS solutions

While firewalls and VPN solutions continue to lead the Latin American network security markets, a strong emerging trend is the shift from IDS to IPS solutions. IPS is a newer technology and includes more advanced capabilities. As a result, IDS and IPS solutions are expected to lead the market by the end of 2011. Regionally, Brazil and Mexico represent the leading markets and the two countries together accounted for around 72.0 percent of the total revenues in 2004. Caribbean and Central America (CCA), Andean, and Southern Cone regions, representing a smaller part of the market, are however expected to show higher growth rates in the medium and long term.

"The lack of awareness that once was a big restraint in the Latin American network security markets, is likely to have a lesser impact in the medium and long term," says the analyst. "Nevertheless, in tapping the tremendous potential of the markets, it is imperative that vendors be proactive in better educating customers of the benefits of their network security solutions."