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Latin American IT Infrastructure Outsourcing Companies Benefit From the Untapped Market Potential

Posted on: Tuesday, 23 December 2008, 07:15 CST

BUENOS AIRES, Argentina, Dec. 23 /PRNewswire/ -- The growth rates of the Latin American IT infrastructure outsourcing market have outstripped those of the more mature North American and European markets, despite the varying development levels of the market in different Latin American countries. Most of Latin America's success can be credited to Colombia, Venezuela, and Argentina, which, in spite of lacking the maturity of Brazil, Mexico, and Chile, have posted excellent growth rates due to their extremely positive gross domestic product (GDP) and previously underserved potential.

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New analysis from Frost & Sullivan (http://www.ITservices.frost.com), Latin America IT Infrastructure Outsourcing Services Markets, finds that the market earned revenues of $1.59 billion in 2007 and estimates this to reach $3.48 billion in 2013.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the Latin American IT infrastructure outsourcing services markets, then send an e-mail to Jose Maria Jantus, Corporate Communications, at jose.jantus@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

While the enterprise market has been one of the biggest end-user segments, the entry of the mid-market has opened up more opportunities for market participants.

"Dedicated hosting was the most popular service in 2007, but its domination is expected to decrease with commoditization," says Frost & Sullivan Research Analyst Fernando Belfort. "However, in Colombia and Venezuela, this service will probably become commoditized only in the medium and long term, as the IT infrastructure outsourcing services in these countries are still underdeveloped."

Customers are gradually progressing from outsourcing just basic IT infrastructure services such as co-location and hosting to outsourcing their entire range of IT infrastructure needs. They are also lured by the advantages of reduced operational costs, improved IT systems, and freedom to focus on their core business.

While these inherent benefits of outsourcing are bringing in orders, IT companies are also driven by the growing sectorial and international regulations that force them to comply with specific infrastructure requirements. The rising number and complexity of regulations such as Sarbanes-Oxley, Basel II, and Payment Card Industry (PCI) requirements are increasingly causing companies to sign outsourcing contracts, despite their apprehensions about entrusting the management of their IT infrastructure to third-party providers.

"Specific regulatory obligations in Chile have been compelling companies to store more data for longer periods, boosting storage contracts," notes Belfort. "While regulations have been pressuring companies in Argentina to implement a contingency plan and thereby, promoting disaster recovery growth, an austerity decree has been driving investments in the IT infrastructure outsourcing market in Mexico."

There has also been robust demand for disaster recovery and storage services, particularly from the banking and financial vertical in Colombia.

Latin America IT Infrastructure Outsourcing Services Markets is part of the IT Services & Applications Growth Partnership Service program, which also includes research in the following markets: south African hosted IP services markets, Latin America managed security services markets, and North American IT and telecom opportunities in the building automation systems markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership(TM) empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents. For more information about Frost & Sullivan's Growth Partnership Services, visit http://www.frost.com.

SOURCE Frost & Sullivan

Source: PR Newswire

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