LatAM Web Hosting Grows Despite Economic Downturn.

Though Latin American countries are struggling to recover from a regional economic recession, demand for web hosting and Internet data center (IDC) services is growing rapidly.

New analysis from Frost & Sullivan, Latin America Web Hosting and IDC Service Markets, reveals that this industry generated revenues totaling $84.9 million in 2000. Combined revenues from Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela should continue growth through 2006.

“Increasing automation processes in the business sector will make it virtually impossible for a company to survive without Internet access and a web presence,” write Frost & Sullivan Research Analysts Juan Carlos Urquidi, Romina Adduci, and Paulo Hoffmann.

Difficult economic conditions will drive companies to increase their market presence and focus their target market. Web hosting and IDC services allow them to do so with a limited initial investment.

While opportunities abound for service suppliers, overcapacity in the marketplace will force all market participants to hone their business strategies. Overcapacity could result in price wars, as some service providers lower prices to attract customers away from competitors. Others might broaden their offerings to lure clients.

“The existence of oversupply in the marketplace will force service providers to consider expanding their range of services to increase revenues,” write the analysts.

A broad set of service offerings might be the only way to satisfy a diverse range of clients.

“Some larger corporations prefer flexible collocation web hosting services, which use existing networking and computing infrastructures,” write the analysts. “However, corporations with less mature web sites and limited funding may require dedicated hosting, in which IT needs are outsourced.”

Meanwhile, small businesses and home offices tend to select shared web hosting services to test the business potential and benefits of a web presence without a long-term commitment.

For more information at http://www.frost.com