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South America Cyber Security Market Overview
The South American cyber security market was valued at $6,582.7 million in 2017 and is forecast to witness a CAGR of 22.7% during 2018–2023. Digital transformation with the adoption of internet of things (IoT), growing demand for end-to-end network security and visibility, and increasing adherence to government regulations are the key factors driving the market growth.
SOUTH AMERICA CYBER SECURITY MARKET, BY SECURITY TYPE, $M (2013-2023)
Based on component, the South American cyber security market has been categorized into solutions and services. Of the two, the solutions category accounted for 66% of the market revenue in 2017 and is expected to continue holding a larger market share in the coming years as well. Further, cyber security solutions have been classified into risk and compliance management; identity and access management (IAM); firewall; security and vulnerability management; encryption; intrusion detection system/intrusion prevention system (IDS/IPS); unified threat management (UTM); disaster recovery; web filtering; distributed denial-of-service (DDoS) mitigation; antivirus/antimalware; and data loss prevention solutions. Among these, risk and compliance management solutions held the largest market share in 2017.
On the basis of deployment, the South American cyber security market has been categorized into on-premises and cloud-based solutions and services. Of the two, the on-premises category held a larger market share in 2017, accounting for 56.7% revenue. However, during the forecast period, the market is expected to witness faster growth in the cloud category. This can be attributed to the increasing deployment of cloud-based cyber security solutions by SMEs.
Based on industry, the South American cyber security market has been categorized into aerospace and defense; government; banking, financial services, and insurance (BFSI); IT and telecom; healthcare; retail; manufacturing; and others, where “others” include education; automotive; and hospitality. The aerospace and defense industry constituted the largest end-user base for cyber security solutions and services in South America in 2017, with a market share of 21%. This can be ascribed to the increasing foreign investments in the field of cyber defense in South American countries.
South America Cyber Security Market Dynamics
AI and machine learning are increasingly being applied to the field of cyber security. Organizations across the South American region are deploying encryption models coupled with AI to detect and prevent potential cyber threats. As the AI tool learns from past encounters with malicious threats, it automatically detects unusual patterns in encrypted web traffic and IoT environments to improve the network security infrastructure.
Also, with data consumption growing at a staggering rate and increase in data interoperability, machine learning is being applied in cyber security for the prediction and identification of anomalies. Machine learning enables collection and processing of data for the better analysis of cyberattacks and the development of a robust cyber defense system. Hence, the increasing use of machine learning algorithms to solve anomalies in the data network is being observed as a trend in the South American cyber security market.
With increasing digital connectivity for data sharing, the need for an effective cyber defense mechanism has grown more than ever. In South America, IoT finds wide application in various areas. For instance, IoT supports smart traffic light systems for real-time traffic management and smart buildings for efficient building management. However, as IoT evolves and expands, so does the IoT botnet. Botnet is a collection of internet-connected devices, such as computers and smartphones, which are infected with malicious software and remotely controlled without the owner’s knowledge. Hackers are exploiting this security weakness in IoT devices to launch DDoS attacks to gain access to critical information.
Furthermore, many countries in South America, including Brazil, Colombia, and Chile, lack regulations specific to cyber security and are, therefore, making persistent efforts to adopt an integrated regulatory framework for the same. Thus, the surge in cyberattacks and the implementation of regulatory standards are the main drivers for the growth of the South American cyber security market.
The lack of an adequate pool of skilled workers for meeting cyber security needs and the budget constraints faced by organizations are the major factors hindering the growth of the South American cyber security market. Prevention from ransomware attacks demands expertise to detect and block such potential threats. According to the World Economic Forum (WEF), South American countries face a shortage of around 50% skilled workforce, and this is expected to have a negative impact on the growth of the cyber security market in the region.
Besides, budget allocation for cyber security in organizations often does not correspond to the rising threat of cyberattacks and, therefore, fails to meet the organizational need for cyber protection. Both public and private organizations face budget constraints in this area, as their spending on other areas, such as marketing and training, often eclipses the spending on cyber security. This can be ascribed to the lack of know-how to calculate the anticipated security threat that the organization faces and the subsequent investment required to prevent cyberattacks. Thus, the budget constraint often hinders the growth of the South American cyber security market if organizations do not carry out preliminary cyber security due diligence to ensure the optimum utilization of budget in order to safeguard their vital business information.
With the widespread adoption of cloud-based services, enterprises are shifting from traditional network architecture to cloud-based cyber security systems. Cloud-based cyber security is gaining prominence, as cloud is a cost-effective and affordable option for both SMEs and large enterprises alike. Cloud-based cyber security solutions enable intelligent gathering of data and threat modeling, easy collaboration of data, and identification and blocking of attacks, with minimum delay between detection and remediation, which, in turn, result in secure communication. Therefore, with advancements in technologies such as AI, natural language processing, and machine learning, cloud-based solutions are witnessing increased demand, thus providing ample growth opportunities to the players in the South American cyber security market.
South America Cyber Security Market Competitive Landscape
Rising cyberattacks in South America have impelled the government to formulate and adopt integrated regulatory frameworks, binding all aspects of cyberthreats, predominantly data privacy. The adoption of these integrated regulatory frameworks has, in turn, created a huge opportunity for the market players, such as IBM Corporation, Cisco Systems Inc., and Symantec Corporation.
Some of the other key players operating in the cyber security industry are BAE Systems plc, RSA Security LLC, Palo Alto Networks Inc., Fortinet Inc., FireEye Inc., Check Point Software Technologies Ltd., and Juniper Networks Inc.