Information and Communications Technologies Sector Profile i Enterprise Market - Mexico

Transcription

1 August 2012 Information and Communications Technologies Sector Profile i Enterprise Market - Mexico 1. Sector Overview The enterprise market makes up 52% of the total demand of Information and Communications Technologies (ICT) in Mexico. The market demand is worth a total $24.17 billion ii, $18.85 billion of which are allocated to Telecom Service acquisitions, $3.7 billion for Information Technology (IT) Services and $2.17 billion for Software. It is estimated that organizational demand of ICT Services and Software in 2012 will grow 19%. The main segments in each category are Voice Services, with 80% of the Telecom Services market; Tools, 1 which covers 38% of the Software market; and Implementation Services, with 47% of the IT Services market. ICT Demand Corporate Market % Telecom Software 8% 12% 38% 80% Telecom Budget Corporate Market 25% 38% Voice Data Internet Software Budget Corporate Market Applications Tools Infrastructure and Security IT Budget Corporate Market Telecom Services The enterprise demand in the Telecom Services market is mainly focused on Voice Services. Internet Services comprise 12% of the market demand, and Data Services are at 8%. This demand comes from the commercial and services sectors to a large extent. The demand in the latter originates from an increase of credits and employment, with the health and education segment standing out. It is also important to underscore that demand for communication services (Voice) has increased due to new openings, mergers, and regional or international expansion of large companies. Software Enterprise demand for the Software market is distributed in a relatively equal manner among Software Tools (38%), Infrastructure and Security Software 2 (38%) and Applications 3 (25%) segments. 13% Implemtation 9% IT Services Operations 27% 47% 14% Planning 13% Support Source: Select, "ICT demand model", August 2012 Growth 28% 19% 20% 23% 21% 21% 21% 20% 21% 13% Source: Select, "ICT demand model", August Tools: development and integration tools, databases, productivity suites, Business Intelligence (BI). 2 Infrastructure and security software: operating systems, system management, virtualization, storage software, security 3 Applications: administrative, vertical, collaboration, content management, ERP, CRM, SCM, KM and other applications 1

2 IT Services Enterprise business opportunities in the Information Technology Services (IT Services) market focus mainly on Implementation Services 4 ; this segment comprises 47% of the total demand of these services. 2. Vertical Markets Demand One sector that fuels ICT growth is manufacturing (18% expected growth in budget allocated for ICT services and software), followed by the construction, automotive and electricity sectors. In the services sector, the expansion of large supermarkets and department stores has brought an increase in the demand for Software, Services and IT Equipment. Growth above the National GDP is expected for the two main tourism hotspots in Mexico, Quintana Roo and Baja California Sur, which will bring a greater demand for ICT in this sector. Finances, education and health also show increased growth rates (14.5%, 19% and 18.5%, respectively). In commercial, education and services sectors, there are opportunities for companies that supply IT Equipment, while finances, government, manufacturing and health mainly demand IT services. Manufacturing and finances are branches that drive Software demand. In the Telecom sector, enterprise market demand is focused mainly on Fixed and Mobile Voice services. In IT, the IT Services and IT Equipment subsectors have the largest participation (40% and 39% of IT sector participation, respectively) -- specifically, tools for handling demographic information and customer needs, business solutions such as ERP and CRM, systems convergence solutions and business intelligence (BI). The latter segment has good expectations for the next 5 years, with an expected combined growth of 27%. Mobile Voice Telecom is the segment that has the greatest demand percentage. In the finances sector, the trend is also directed toward greater demand for Data services. Vertical channels that drive greater demand for Telecom services are healthcare, education, retail and services sectors. 60% 5% 7% 28% Participation of the Organizational IT Demand in Mexico by Vertical Channel % 6% 14% 36% 28% 24% 33% 6% 13% 4% 21% 14% 18% 39% 5% 13% 46% 49% 45% 43% 51% 8% 8% 33% IT Equipment Consumables Software IT Services 71% 20% 2% 7% Participation of the Organizational Demand of Telecom in Mexico by Vertical Channel % 22% 8% 51% 18% 28% 23% 29% 18% 8% 29% 25% 59% 63% 64% 20% 15% 18% 14% 15% 10% 8% 7% 8% Mobile Voice Fixed Voice Data Internet Source: Select, Regional Dynamics At the regional level, ICT in the enterprise market is expected to have good expectations due to efforts by governments to make the region more attractive to investors, mainly for aerospace, automotive, auto parts and electrical-electronics industries, which will also drive demand. As shown in the following graphic, regional growth expectations are higher in the central regions (Hidalgo, Morelos, Puebla, Querétaro and Tlaxcala 5 ) and west-central Mexico (Colima, Guanajuato, Jalisco, Michoacán and Nayarit 5 ), with growth rates from 8% to 9%. However, the most important market for the ICT sector in Mexico is the Valley of Mexico (Mexico City and the Metropolitan Zone). This region's market share is more than 40% and has a growth rate of 8%. 4 Implementation services: customized software development and integration 5 2

3 ICT Growth for Distribution and Regional Growth of the Enterprise Market Budget for ICT in Mexico 9% 8% Central West- Central Valley of Mexico 7% North 6% Southeast Pacific 5% 0% 20% 40% 60% Participation in 2012 annual invoicing Source: Select, ICT Demand Model, December 2011 Note: The size of the bubble represents 2011 invoicing in billions of Canadian dollars 4. Subsector-Specific Performance Virtualization According to IDC México, large companies have reported an average of 28.2% of their installed base as virtualized and plan that at least 41% of new servers to be acquired in the next 12 months will be virtualized. At the regional level, growth of the installed base of virtual servers is 30%, both among large and medium sized businesses. In Mexico, virtualization services are now a common element in information technology infrastructure in large companies, which seek to take better advantage of data centers and improve their information processing capacity. There are large corporations in Mexico that have up to 90% of their infrastructure virtualized. In the first half of 2011, the value of virtualized servers was $51 million, which represented a 12% growth rate. The most active sectors in its implementation have been the financial, telecom and manufacturing industries, which are implementing primarily remote systems. This year, the largest investment in this area is expected to be 44% utility companies and 33% in the financial sector. 6 Regarding the supply of cloud services, it is expected that services outsourcing will grow in the next few months, although the market is still small. The increase in third-party services, especially cloud services, offers a growth alternative for data center, consultancy and carrier businesses. 6 IDC, November

4 Big Data The implementation of Big Data will occur as part of a long-term process, provided that having solutions for processing large amounts of data, requires that companies improve the type of information they collect. For this, improvements will be made to database quality in order to implement analytical solutions. That is why the distribution channel in Mexico must first focus on offering solutions that allow companies to make progress in this process under basic and functional sales models. In Mexico, large corporations such as Estafeta, FEMSA and Pemex are already implementing analyses of Big Data 7. Business Intelligence The market value growth of business intelligence (BI) tools in Mexico is expected to reach 27%, tied mainly to the consumption goods industry (4th most important user of BI in Mexico), and by the drive generated by software and service providers which continue to offer services with better analytical features, presentation and online access, taking advantage of the increase of mobile devices. The demands of the competitive environment and the pursuit of new opportunities have made companies more frequently consider adopting these analytical tools 6. IT Services IT Services are profiled as a growing business segment due to the company search for optimal costs and incremental sales. The externalization of services is strengthened with managed services, focused on network administration and business security (NOC & SOC). Telecom operators are driving the supply of cloud services, mainly in applications and infrastructure solutions. Software development services will increase the demand for three factors: security, high availability, management and applications maintenance. Telecom Perspectives In Mexico, 42% of companies allow enterprise network access through personal devices; 19% of them also allow access to tablets. In the next few years, the trend will focus on mobility through BYOD (bring your own device), which will have a major impact on companies because they will have to evolve not on their plans but based on user plans. Companies will have to invest more on security (new security threats related to hybrid malware and the use of mobile devices drive the demand of quicker and more effective solutions), connectivity, access to information and device management, since the trend is to access any type of business information through any device, personnel or organization. On the other hand, the biggest part of companies' investment corresponds to strengthening wireless networks to allow for larger device connectivity. Carriers in the IT market are offering data centre services, sharing infrastructure for personal use and for customers. Investment in this business by carriers is strong. Currently, there are 40,000 square meters of data centers in Mexico, and the number of them continues to grow, as a result of the carriers supply of cloud and managed services. IDC estimates that Telecom companies in Mexico will no longer just be service providers, and will become network infrastructure providers. On the other hand, enterprise networks continue to migrate to more efficient technologies; such is the case with private lines that are increasingly replaced by MPLS and Dedicated Internet services. In the case of MPLS access and dedicated Internet, the average growth in the past 12 months has been from 4% and 5%, respectively. The arrival of new marketing 7 Big Data facilitates company operations. Manufactura.com, August

5 models, such as Cloud Computing, and more intensive use of video services, will require greater bandwidth, which will revitalize the industry. 5. Distribution Channels and Business Models According to the consultancy firm Select, the business environment has experienced major changes, since to a good extent the market has been able to evolve from processes automation to platform automation; from ERP systems installation to data center automation. This change has impacted even the distribution channel, which has stopped selling solutions to sell them as services, exploring new modes of services delivery, such as remote services, low demand as a service and has even had to create alliances with hardware, software and service providers to expand their reaches. The channel that supplies the enterprise market, to telecommunications operators and the government is comprised mainly of Value-Added Resellers (VARs), large integrators, wholesalers, the same operators through corporate sales areas and distributors/manufacturers of personal systems. 8. For the implementation and development of their technological platforms, large companies usually negotiate long-term contracts with the most important integrators, such as IBM, HP and Accenture, among others. Wholesalers, VARs and smaller integrators attend to specific or niche projects within these companies. Providers of Canadian technology interested in attending to the enterprise market in Mexico can approach both large and medium integrators that have experience in the channel and with whom they can make business alliances. 6. Key Players: Supply and Demand Competitive Setting and Market Share The following table has general characteristics of enterprise market demand for vertical markets, which were presented for the first time in the report Information and Communications Technologies Market Profile - July Some relevant participants are mentioned, as well as the demand s dollar value and trends in each case. 8 A graphic on the distribution channels model of the enterprise sector in Mexico is included in the report "Information and Communications Technologies Market Profile - July 2012". 5

6 Vertical Markets Education (Tec de Monterrey, Universidad del Valle de Mexico, Universidad LaSalle) Commercial (Wal-Mart, Soriana, Oxxo, Comercial Mexicana) Healthcare (Grupo Ángeles, Star Médica) Services (Deloitte & Touch, PWC, KPMG, Grupo Posadas, Alsea, CEMSA, Promotoría Ambiental, Softtek, Inmuebles Carso) Spending, growth and participation IT Value: $1.34 billion IT Growth: 14% IT Participation: 12% Telecom Value: $ 436 billion Telecom Growth: 4% Telecom Participation: 5% IT Value: $1.44 billion IT Growth: 9% IT Participation: 12% Telecom Value: $ 3.07 billion Telecom Growth: 1.5% Telecom Participation: 29% IT Value: $574 million IT Growth: 11% IT Participation: 5% Telecom Value: $377 million Telecom Growth: 6.5% Telecom Participation: 5% IT Value: $2.37 billion IT Growth: 5% IT Participation: 20% Telecom Value: $ 3.06 billion Telecom Growth: 2% Telecom Participation: 29% Vertical Market Demand Sector perspectives Representing only 16% of total schools in Mexico, private schools have more than 50% of ICT spending in the education sector, which totaled $677 million in Retail stores and supermarket segments stand out in the commercial sector, since they contribute the greatest amount of sales volume -- 59% of sales surfaces. They are followed by department stores, with a participation in sales of 26%, and specialized stores, with 21%. Companies in that sector require products that allow them to be more efficient and competitive to expand their market share. The main demand is for distribution chains systems, inventory management systems, financing solutions and large-scale marketing planning. In 2012, IT spending by retail, department stores and supermarkets will approach $410 million, with IT services being the subsector with the largest participation, at nearly $200 million, followed by equipment, with an investment of over $150 million. Software and consumables are the segments with the least investment, as they do not exceed $50 million. Based on a Select analysis, it is estimated that IT investment this year in public healthcare institutions will surpass 62% of the sector's total, or over $1.1 billion. The private sector has seen the creation of large corporations that require vertical services to make hospital network operations more efficient. Renovations to ICT platforms are taking place, and compatible solutions are required. The trend in IT solutions is focused on the acquisition of electronic clinical files and specialized modules for different areas, implementation and improvements to ERP, mobile solutions and wireless networks. The income of Mexico's non-financial private services reported a growth of 6.3% in May 2012 compared to the previous year. Annual increases in recreational, cultural and athletic services (27.9%) stand out, as well as support services for businesses and waste management (13.7%), professional, scientific and technical services (8%) and temporary lodging and food and beverage preparation (6.5%). The ICT needs of the services sector are focused on keeping its branches connected to the central system, allowing for more precise control of invoicing, prices, response times, etc; reducing operating costs derived from phone calls and misuse of applications; installing efficient security schemes for LAN users; directing efforts to improve business support systems; preserving confidentiality of information of services and clients; performing secure transactions; and keeping control of availability and infrastructure performance levels. 6

7 Finances (BBVA, Banamex, Santander, Banorte) IT Value: $1.6 billion IT Growth: 13% IT Participation: 13% Telecom Value: $446 million Telecom Growth: 2% Telecom Participation: 5% Vertical Market Demand Cont In 2010, 19.3% of IT investment occurred in this sector, and it is expected to be 19.6% this year. Credit recovery by commercial banking, the adoption of new international security standards and the pressure to reduce operating costs will cause conservative growth in the purchase and contracting of IT products and services for the financial sector in Financial sector companies mainly require analysis tools to reactivate credit and reduce the levels of overdue accounts; solutions for implementing new international standards, such as Basel III to reduce financial risks by increasing capitalization levels of banks; increasing social media strategies and mobility for customer support and attracting potential clients; solutions for increasing access to banks -- for example, mobile banking. Manufacturing (Unilever, Embotelladora Arca, Kellog, Nestlé, Grupo Lala, Bachoco, Bimbo, Coca-Cola, Kimberly Clark, Alpek, Mexichem, Bayer, Pfizer, Grupo Industrial Saltillo, Porcelanite, Cemex, Vitro, Ternium IMSA, Grupo México, Peñoles, Helvex, Sony, LG, IBM) IT Value: $3.73 billion IT Growth: 17% IT Participation: 30% Telecom Value: $1.95 billion Telecom Growth: 2% Telecom Participation: 18% Source: Business Connect with information from Select, CNN Expansión and IDC, July-August 2012 The manufacturing sector is one of the most competitive activities in Mexico, being the main attractor of foreign direct investment (FDI) % of the total attracted - - and with high exportation numbers % of total exports, with finished automotive and car parts production, televisions, data processing machines, phones, medical equipment and others standing out. Manufacturing activities contributed to 17.57% of the national GDP in 2011; they are also a major job creator, according to the National Institute of Statistics and Geography (INEGI). It has been a dynamic sector for growth; after the crisis of 2009, it was the main driver of economic recovery in 2010 and in 2011 it maintained that leadership, supported by U.S.-bound exports. In Mexico, states such as Querétaro, Nuevo León, Morelos, Jalisco and Puebla have seen industry development in areas including aerospace, electronics, pharmaceuticals, furniture and marble, respectively. 7

8 7. Opportunities for Canadian companies In general, the areas with the greatest opportunities in the ICT market in Mexico within each subsector based on expected growth, market trends and expert opinions include: Equipment: Network and storage equipment Tablets and tablet hardware. Mobile computing for the consumer and business market, servers and virtualization equipment. Security equipment for facilities and vehicles, tracking and monitoring Software: Tools to handle and optimize information in the commercial and services sector; demand for remote services, demographics and customer needs; improvements in information reporting, segmenting and customizing information, loyalty programs, interactive campaigns, cross-sales, innovation of formats. ERP and CRM with demand in the manufacturing, finances and services sectors, functionality for stores. Finances seek to improve their supply through BI, ERP, CRM and POS, customer segmentation and solutions to expand coverage. BI as a next step after ERP implementation in large companies. Greater ERP demand in medium-sized companies for a sales approach toward this market. Desktop virtualization (more efficiency in preparing for the cloud) Computer solutions in the cloud, seeking economies of scale and specialization as an added value. Software as a service (Saas). Big Data (mobile applications and content platforms), security solutions for mobile devices; applications for the consumer market: customer service, facilitating operations, optimizing routes, reducing fraud risks, reducing costs and administrative times, among others. Security solutions for compliance with regulations, driven by the Federal Data Protection Law. Security solutions for mobile devices. Network security solutions. Unified and collaboration communications IT Services Outsourcing -- mainly administrated services focused on network administration and business security (NOC & SOC) for optimizing operations. Equipment and software services and services integration. VARs with specialized solutions by industry, managed services and other value-added services. Mission critical services and software development in areas such as security, high availability, administration and maintenance of applications. Outsourcing and services in the cloud for data centers, consultants and carriers. Solution implementation services and solutions outsourcing for business processes (BPO), training. BI solutions drive the demand for database integration and IT services. Operators increase the supply of valued-added IT services. Telecommunications Services: Mobile applications development for the business sector. The commercial sector increase demand in voice and internet and finances in solutions to expand unified coverage and communications. Solutions for Internet, TV and telephony service packaging (mainly for smaller service providers because they are unable to design efficient packages). Value-added services meant to support operators' strategies to increase ARPU. Applications and infrastructure solutions for services on the cloud. MPLS and dedicated Internet, infrastructure improvements to increase the demand for data and video, OTT (new competitors entering the market). It is recommended that Canadian companies offer fast, modular implementations specialized in the sector/niche and customization. 8

9 Canadian Government Contacts Embassy of Canada in Mexico Contact: Guillermo Larios Consulate General of Canada in Monterrey Contact: David Valle Consulate of Canada in Guadalajara Contact: Fernando Baños Foreign Affairs and International Trade Canada Internet: Bibliography Select Consulting - Seminario Soluciones y Servicios Telecom 1T2012, May Select Consulting - Sistema de información Contínua para la Alta Dirección (SICAD), January-June Personal interviews with the IT departments of large corporations in Mexico, July Embassy of Canada - Market Preparation Program ICT Mission 2011, ICT Market Profiles, Octubre Select Consulting - Demanda de servicios TIC y software en las organizaciones en 2012 Select Mejorando el desempeño de las empresas con soluciones de inteligencia de negocios, Mayo 2011 Select Consulting Tendencias de adopción de TIC en organizaciones mexicanas en 2012, February 2012 Select Consulting Mercado de servicios Telecom, February 2012 Select Consulting Mercado de soluciones empresariales, February 2012 Select Consulting Posibilidades de TIC en el repunte del turismo, July 2011 Select Consulting Sector de retail y sus planes de expansión en 2012 Select Consulting - Dinámica del sector servicios en el 2011 y sus perspectivas en TIC, November 2011 Select Consulting Perspectivas de Business Intelligence para el comercio, October 2011 Select Consulting Potencial de crecimiento de la bancarización a través de la telefonía celular, November 2011 IDC Crece en México la cultura de uso de información y la incorporación de herramientas de BI, May 2012 IDC IDC México destaca los elementos tecnológicos para el sector financiero, June 2011 IDC La adopción de la virtualización en México, November 2008 IDC México, segundo lugar en virtualización de la región, November 2011 IDC 2012 y más allá, cifras y tendencias a tomar en cuenta i The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. ii All monetary amounts are expressed in Canadian, unless otherwise indicated. The conversion rate to Canadian is based on IDD Information Services, Tradeline, August