WHITE P APER

Netw orking Skills in Latin America

Sponsored by: Cisco

Romina Adduci Ricardo Villate

IDC México Manuel Avila Camacho 32, piso 11 - Torre Esmeralda III, Col. Lomas de Chapultepec, Mexico, D.F., 11000 (52.55) 5010.1400

Evelyn Pineda
January 2013

IDC OPINION
Skills have become the global currency of 21st century economies. Without sufficient
investment in skills, technological progress does not translate into productivity growth,
and countries can no longer compete in an increasingly knowledge-based global
economy. In Latin America, the skills gap – evocatively known in Spanish as “la
brecha”, will continue to have major setbacks and challenges for the economic
development of the countries in the coming years. The economic growth experienced
in the region as well as the rapid emergence of new technologies that radically impact
networking skills are becoming a major challenge whereby effective skills measures
and policies must be part of any response to address this challenge.

The definition of networking skills used for this analysis refers to the skills of those
people needed to plan, design, manage and support the networking technologies in
an organization. The definition of skills needs to be broad due to the proliferation of
networking technologies in organizations of all sizes and across vertical industry
segments.

The next generation of IT will have at its core a robust foundational network. Trends
driving network upgrades, including growth of voice and video over IP, the
proliferation of network-attached and wireless devices, virtualization and cloud
computing, are all contributing to continued demand for competency in the enterprise.
With networking being fundamental to next-generation converged infrastructures, and
an increasing challenge for enterprises to add intelligence to their networks to be able
to handle traffic flows, complex applications, and quality-of-service requirements and
to ensure that applications are aligned with business needs, team talent to keep pace
with changes in technology and maintain an IT team´s high level of performance will
increasingly become a key strategic advantage. The Latin America trends show an
increasing need for people with networking skills. Well-trained teams focus on higher
value-added activities, align technology demand with the business and create value
for the organization.

According to IDC's Networking Skills Model analysis, the demand for networking skills
currently surpasses supply and this trend will continue to do so for the foreseeable
future. In fact, unavailability of skilled professionals may affect some markets' ability
to extract value from technology.
 EXECUTIVE SUMMARY
IDC is keenly aware of the increased discussion about the lack of skills in specific
areas in the IT industry. In late 2007, IDC developed a research initiative around the
skills gap in various segments of the IT industry, which we are now refreshing in order
to track and reflect new market developments. In IDC´s opinion, the nature of the
skills gap in 2012 and beyond is very different from what was observed some years
ago.

IDC conducted 767 interviews in 8 countries in Latin America: Argentina, Brazil,

Chile, Colombia, Costa Rica, Mexico, Peru and Venezuela. Additionally, interviews
were segmented by vertical industry and size segments: goverment, education,
healthcare, telecoms, financial services, manufacturing, retail/wholesale,
media/broadcasting/publishing, travel/transportation/distribution, resources and
services in companies with more than 100 employees. Respondents were selected
based on their responsibility for network infrastructure and management of
professionals involved in network design, operation & maintenance, deployment, and
support. The survey was conducted in the native language of the respondents
(Spanish and Portuguese). Results from this survey were analyzed in conjunction
with data from several ongoing IDC research practices around networking and
information technologies. This document intends to explore the results of this analysis
in what IDC has dubbed "the evolution of the networking skills gap in Latin America".
As we look at this generation, where converged IT infrastructure is shaping enterprise
networks from the datacenter to the network edge, unification, integration, and
convergence, IDC was given the task of exploring the growth and demand of
professionals in essential (e.g., routing & switching) and emerging technologies (e.g.,
cloud). Based on the results of the survey and comparing the result obtained in 2007,
it is clear that organizations continue to have an increasing lack of skilled people with
networking skills. The demand for networking skills currently outstrips supply and this
tendency will be prevalent throughout the forecast period in the Latin American region
especially motivated by the following trends:

Demand for greater efficiencies within the IT infrastructure, with virtualization as

the cornerstone

The proliferation of devices — both wired and wireless

Requirements for the network to support interactive (video) and virtualized

IT-supported business applications

Cloud or host-based networking across multiple enterprise technologies as an

emerging network and services offering

The different types of networking skills assessed in this document include:

Total networking skills gap refers to the aggregation of essential and emerging
networking skills. In 2011, IDC estimated a shortage of approximately 139,800 FTEs
professionals with networking skills across the Latin America region with this number
increasing to 296,200 FTEs by 2015. These figures represent a skills gap (calculated
as a proportion of total demand) of 27% in 2011 and 35% in 2015. The number of
skilled people is based on IDC’s proprietary skills model which calculates full time
©2013 IDC 2
equivalents (FTEs) which are defined as IT professionals spending 100% of the time
working with networking technologies.

In 2007, IDC estimated a shortage of approximately 84,000 professionals with only

essential networking skills across the Latin America region with this number
increasing to 92,000 FTEs by 2012. The emerging technologies will demand
additional skilled headcount in other key areas such as: Unified Communications,
Video Technologies, Cloud Computing, Mobility Technologies and Datacenter &
Virtualization, a majority of whom will require essential networking skills as the basis
for their profession.

Essential networking skills. This refers to basic or core networking skills, network
security, IP Telephony, and wireless networking, and represented 55% of total FTEs
skills gap in 2011 and will account for 44% in 2015. IDC estimated a skilled-people
shortage of around 76,800 FTEs in 2011, increasing to 129,100 FTEs in 2015. These
figures represent a similar FTEs skills gap of 22% in 2011 and 25% in 2015. The
rapid adoption of networking technologies by organizations throughout the region is
continuously driving demand for these skills causing the gap to widen at a Compound
Annual Growth Rate (CAGR) of 14% from 2011 to 2015.

Emerging networking technology skills. This refers to skills in technologies such

as unified communications, video, cloud computing, mobility and datacenter &
virtualization and represented 45% of total FTEs skills gap in 2011, growing to 56% in
2015. Within this group of skills, IDC estimated a FTEs shortage of skilled-people of
around 63,000 FTEs in 2011, increasing to 167,100 FTEs in 2015. These figures
represent a projected incremental skills gap of 42% in 2011 and 53% in 2015. As
these technologies ramp up and gain a stronger foothold within Latin American
organizations, the demand for these skills will cause the gap to widen at a Compound
Annual Growth Rate (CAGR) of 28% from 2011 to 2015.

Other Key Findings. Besides the size of the networking skills gap, other results from
the model illustrate that the demand for networking skills has increased not only in
numbers but also in complexity.

 Cross-technology skills. According to the survey conducted by IDC, 80% of

respondents expected to need multiple technology skills. In 2007, 70% of
respondents indicated the need for multiple technology skills. Therefore an
increase of 10 percentage points over responses from five years ago is noted.

 Vendor certifications. Certifications play an important role in organizations for

more than 75% of the companies interviewed. IDC research found that
organizations view vendor-based certifications as an important attribute when
assessing potential staff to fill networking-related positions. Of those surveyed,
49% said that those certifications are "very important” to them while 28% of them
found it "important”.

 Impact of Managed Services on the networking-skilled professional's

development. As the outsourcing trend is growing stronger in Latin America, a
growing number of companies will obtain new networking skills from a service
provider rather than training internal staff. In this sense, 62% of companies found

©2013 IDC 3
 it "very important" for service providers to have certified staff, while another 29%
of respondents say they consider this to be "important". IDC expects that
emerging technologies skills will be demanded more from Service Providers,
especially in technologies such as Datacenters and Cloud Computing
technologies.

IN THIS WHITE P APER

This IDC White Paper analyzes the demand and supply of networking professionals
in Latin America. This White Paper provides an update of the analysis carried out by
IDC in 2007, and stems from a combination of regional and local analysis of survey
results coupled with the IDC Skills Model, which together result in an accurate picture
of the current situation as well as future trends.

The Latin American region is continuing a steady growth path where a significant
number of companies are expanding operations or renewing an outdated IT
infrastructure, and adopting new technologies in order to increase competitiveness.
The network is taking a more important role for companies, becoming a crucial part of
the business backbone. 96% of respondents to our survey reported the network will
become more important for their organization in the future.

Beyond the typical role of connectivity for email and internet access widely adopted
by companies, 47% of companies use the network to gain access to the organization
from remote locations as well as for sharing process information within business
relations, including key partners, suppliers and customers. Unified communications
are gaining importance as more IP networks are deployed. According to an IDC
survey, 32% of respondents use the network as a platform that enables employee
collaboration using specific applications that combine mobile phones, video,
applications and other tools. Despite the importance of the network, survey results
indicate that organizations in general are not investing as needed in skills
development and formal technical training. IDC has found that a significant number of
IT organizations within Latin American companies lack a comprehensive strategy and
approach for measuring the value of formal training. According to survey results, 55%
of the companies interviewed have their networking-skilled professionals formally
certified.

IDC noted that companies could be experiencing shortages in certain networking

competencies. As a general practice, most companies hire a certified professional,
who will be in charge of a team of non-certified engineers that learn the basic
procedures as on-the-job training. Practical experience definitely helps fire-fighting.
Nonetheless, structured and formal training brings more value to the company and
allows personnel to acquire other essential and emerging skills.

Areas experiencing the greatest pressure include security skills, with 87% of
respondents considering extra security skills requirements for the next 12-24 months,
followed by general networking skills (maintenance & operations) considered by 84%
of the companies as an area to add extra skills. Wireless technologies are third, with
82% of respondents considering investments in additional skills. IDC believes this is a
result of the explosion of devices connected to the network. Companies are

©2013 IDC 4
strengthening their fixed networks while those mobile networks support a greater
number of devices.

IDC found that 89% of the companies interviewed believed that vendor certifications
will become more important in the near future. Along those same lines, 90% of
companies believe that service provider's staff must have professional certifications, a
condition that will become increasingly important for them.

As a result of this, it is apparent that one of the most effective ways to combat the
growing challenge posed by the lack of skilled staff at organizations is by increasing
the number of students and professionals receiving formal training in all essential and
emerging technologies.

METHODOLOGY
In the first half of 2012, IDC Latin America conducted a survey and combined it with a
supply-side study to analyze the current status for both the demand and supply side
of networking skills in 8 selected Latin American countries. The study provides an
update to the one conducted by IDC in 2007. In addition to the previously measured
essential networking skills, IDC has introduced an analysis of other technologies that
while enabling new capabilities and advantages introduce new challenges with
regards to management, maintenance and support of the network. IDC has identified
these as emerging networking skills including: Unified Communications, Video
Technologies, Cloud Computing, Mobility Technologies and Datacenter &
Virtualization.

The countries analyzed include: Argentina, Brazil, Colombia, Chile, Costa Rica,
Mexico, Peru and Venezuela.

IDC leveraged the results of an end-user survey conducted from May to July 2012 to
define current and future trends related to the use and development of networking
skills, as well as the role of the network in Latin American organizations. IDC
contacted approximately 4,784 IT managers in order to arrive at 767 completed and
valid interviews. At 95% confidence level, the margin of error for 767 interviews is +/-
3.54%.

Respondents represent organizations of 100+ employees and verticals including the

following: Government, Telecom, Healthcare, Education and Enterprise (Financial
services, manufacturing, retail/wholesale, media/broadcasting/publishing,
travel/transport/distribution, natural resources and other services) (c.f. Figure 1).

©2013 IDC 5
 FIGURE 1

Number of Employees
Approximately, how many employees does your organization have nationwide?

1000+ 10% 12% 11% 3% 65%

500-999 8% 9% 9% 5% 71% Government

Education
Health
Telecoms
250-499 11% 9% 11% 3% 67%
Enterprise

100-249 7% 8% 8% 4% 73%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: IDC, 2013

The survey data has been used to populate IDC's skills model and to make market
predictions. The model is based on economic and statistical indicators in each
country, including gross domestic product (GDP), IT workforce estimates, population
growth, registered companies, as well as forecasts from IDC's syndicated studies
such as Latin America Enterprise Networks Systems Tracker, Latin America IT
Services Tracker, Latin America Unified Communications Tracker, Latin America
Software Tracker, Latin America Business ICT Services Tracker, Latin America Cloud
Computing Technologies, Latin America Server Virtualization Tracker, Latin America
Emerging Markets Tracker, Latin America Mobile Devices Tracker, Latin America
Security Appliances Tracker, Latin America PC Tracker, and Worldwide Black Book.
Please refer to the Appendix for a more detailed methodology description and
glossary.

SITUATION OVERVIEW

REGIONAL AN ALYSIS

The ICT industry is in the midst of a "once every 20– 25 years" shift to a new
technology platform for growth and innovation — we call it the third platform — built
on mobile devices and apps, cloud services, mobile broadband networks, big data
analytics, and social technologies. At least 80% of the industry's growth and
enterprises' highest-value leverage of IT will be driven by these third platform
©2013 IDC 6
technologies as well as an explosion of new solutions built on the new platform and
rapidly expanding consumption of all of the above in emerging markets. Today, third
platform technologies and the services around them generate only about 20% of all IT
spending, but they are growing, collectively, at about 18% per year — six times the
rate of the rest of the IT industry. Given the importance and acceptance of these
technologies in enterprise environments, towards 2020, these technologies will
inevitably represent 80% of all IT spending.

Latin America is not immune to these trends and the economic characteristics of the
region encourage technology adoption for the following years. Countries in the region
are being characterized by their position of strength and driven by the momentum of a
decade of prosperity. During this decade, 12% of the population in Latin America has
moved out of poverty (1999-2010, Source: ECLAC) and 15% has become a member
of the middle class (2000-2010, Source: Banco Santander), which now comprises the
majority of the population. In technology, IT spending has outgrown the global
average by 2.1 times or more every year for the last ten years (2002-2011). In
addition to IT investments, the telecommunications services market in Latin America
will also outpace the global average by an even more impressive factor of 2.8 times,
albeit at a slower rate than IT since this is a much larger and more mature market.
Latin America grew 9.8% in telecommunication services spending in 2012.

Furthermore, the networking market has shown a significant stability and investment.
As next generation requires a robust network at its core, a technology reconversion
and replacement of former legacy installed base is taking place in Latin America. The
networking market is being fueled by pillars of the third platform: mobility,
datacenters, cloud computing, social media and virtualization. Also, Government
programs and Service Providers have significantly contributed to the steady growth in
most of the countries.

These illustrative facts demonstrate how Latin America is slowly shrinking the
technology gap and increasing its competitiveness to face the global challenges. Still,
the road to greater competitiveness is strewn with minefields: companies throughout
the region face several challenges in the fast-paced and ever changing world of
technology. Throughout the region, IDC would like to highlight the following trends:

Intelligent Networks for new applications and services

The network must now support a mix of applications and services, including
voice and video, enhancing security, deploying WLANs and supporting wireless
applications, and even supplying power to end-user devices with power over
Ethernet (PoE). This lays an additional burden on the network, not only by
placing increased demands on functionality and resiliency but also by driving the
need to build intelligence into the network to control traffic flows, ensure that
application delivery is aligned with business needs, and mitigate security threats
compounded by increased complexities caused by the mix of users and
applications supported.

Demand for greater efficiencies within the IT infrastructure, with virtualization as

the cornerstone.

©2013 IDC 7
 Network support of virtualized workloads will continue to drive datacenter and
enterprise network investments. One of the greatest challenges for network managers
is architecting a new network that supports and furthers application availability on
virtualized x86 systems. This creates a blind spot for network administration teams,
making it difficult to effectively troubleshoot and manage problems related to virtual
machines. This lack of visibility makes it difficult for network administrators to
understand traffic patterns and create policies around virtual machines. Additionally,
to move to the "next level" of virtualized IT; the network must be an active participant
in virtual machine policies and service levels. Nonetheless, IDC also believes that the
benefits of virtualization will expand to include unified communications (UC).

The proliferation of devices — both wired and wireless

With the explosive growth of smartphones, and more recently tablets, IT has
been forced to reevaluate how to support this growing array of devices in the
enterprise. As the number of devices, applications, and interactions increases,
we can expect to hear more around fixed-mobile convergence, 3G/4G offload,
smartphone-based collaboration solutions, virtualization of business apps for
smart mobile devices, mobile device security and management and, most
importantly, how enterprises will converge their IT infrastructures into an
intelligent, scalable fabric that is ready for tomorrow.

Cloud or host-based networking across multiple enterprise technologies as

an emerging network and services offering

IDC believes that delivering network services through the cloud will garner more
attention and, in some cases, will be a building block for the next generation of
network provisioning and delivery models. These new models will be built upon
existing and emerging technology platforms, whether they come from smaller,
more nimble vendors or from established leaders in network infrastructure. If
"everything as a service" is the mantra for the new IT, then networking as a
service will be looked at favorably.

Total Networking Skills Demand and Supply Trends in Latin America

Region-wide, IDC estimates that the demand for networking skills currently outstrips
supply and will continue to do so during the forecast period (c.f. Figure 2). Total
Networking Skills is the aggregation of essential and emerging networking skills. In
2011, IDC estimated a shortage of approximately 139,800 FTEs professionals with
networking skills across the Latin America region with this number increasing to
296,200 FTEs by 2015. These figures represent a skills gap (calculated as a
proportion of total demand) of 27% in 2011 and 35% in 2015. The number of skilled
people is based on IDC’s proprietary skills model which calculates full time
equivalents (FTEs) which are defined as IT professionals spending 100% of the time
working with networking technology.

©2013 IDC 8
FIGURE 2

Total Networking Skills Demand and Supply Trends in Latin

America, 2011-2015

900,000
(Total Networking Skills)

800,000
700,000
Demand
600,000
500,000
400,000
Supply
300,000
200,000
100,000
0
2011 2012 2013 2014 2015
Gap
Supply

Source: IDC, 2013

Essential and Emerging Networking Skills Gaps in Latin America

Constant flux and dynamic change have always been the norms for the enterprise
security landscape. Recent dynamics around early-stage cloud and datacenter
buildouts, as well as increased traction for enterprise mobility arise as the main
technological changes within companies that are permeating investments in the IT
ecosystem. According to the results of the Networking Skills Gap Model, in 2011 55%
of the professional shortages focused on security and datacenter technologies. This
gap will represent 62% in 2015. Emerging technologies will require more specialists
focused on understanding and managing specific network solutions. As essential
technologies represented 55% of total gap in 2011, this will decrease to 44% in 2015
resulting in an increased demand for professionals focused on emerging
technologies.

The exponential growth of data and information is placing pressure on the

restructuring and strengthening of corporate datacenters. IDC has observed that skill
gaps will center during the next years in two key areas: Datacenters and Security.
The increasing number of devices connected to the network, and companies’
information convergence across different sites, increase the pressure for security
departments. Emerging technologies such as cloud computing, virtualization and
mobile devices are rapidly increasing the complexity of managing datacenters. Under
these scenarios, organizations should consider taking steps to manage organizational
resources to better control information growth.

©2013 IDC 9
 Also, the explosion of mobile devices within the enterprise has introduced a new
dynamic into enterprise wireless LAN (WLAN) networks. Businesses are increasingly
adopting mobile applications to communicate with their employees, enhance business
processes, and streamline customer interactions. This results in the need for
business-focused applications also driven by a variety of factors including
consumerization of IT, where increasingly more employees are bringing their own
devices into the enterprise (BYOD). The combination of technological, business, and
organizational changes is driving changes across the entire WLAN market at a faster
rate than predicted years ago. Nowadays, enterprises need adaptable, robust, easily
deployed wireless LAN solutions to support employee's mobile working needs.

On the other hand, companies seek to take more advantage of their networks,
wanting to directly link IT with business results. Enterprise IT managers are finding
synergies in integrating other parts of their enterprise communications systems into
their WLAN. Voice, Unified Communications (UC) and video technologies are
prominent examples of this. Commonly, organizations often approach
communications as a tactical set of disjointed point solutions provided either uniformly
across the organization or on an ad hoc basis within specific business units. UC
solutions provide an opportunity to unify infrastructure silos and increase productivity
to infrastructure already present within the organization or adding some other
solutions, such as video.

Service Providers are other key players that are rapidly emerging as a growth market
segment for WLAN rollouts, moving up from traditional "hotspot" applications to more
of a mainstream 3G/4G offload segment, which is more lucrative in the times ahead.
Moreover, they are becoming a great vendor by restructuring their business and
leveraging their networks to offer more value added services, taking advantage of the
capillarity of their networks and position in the SMB (Small and Medium Business)
market.

New services delivered though the cloud, are permeating the SMB market. However,
the complexities that networks are experiencing are leading a greater number of
companies to outsource their IT departments and networks in order to respond to
changing technology cycles. As result of the tendencies described above, IDC found
that the greatest skills gap is in the area of Data Canter, followed by security and
wireless skills gap. (c.f. Figure 3).

©2013 IDC 10
FIGURE 3

Essential and Emerging Networking FTE (%) Skills Gap in Latin

America, 2011-2015

60%
51% 53%
48%
50% 45%
42%
40%

30% 25% 25%

23% 24%
22%
20%

10%

0%
2011 2012 2013 2014 2015
Essential Emerging

Source: IDC, 2013

Essential technologies will grow at a CAGR of 14% 2011-2015. The next generation
of IT will have at its core a robust foundational network. As companies are
continuously adding more elements to the network, specialization will become critical
to companies to fulfill all requirements. Demand of essential technologies will be
driven by security technologies as more elements are connected to the network, risks
and threats to information increases. Wireless technologies are healthy and clearly
benefiting from the explosion of mobile devices which require optimization as WLAN
is embraced as a key network access technology for applications.

Emerging technologies will grow at a CAGR of 28% 2011-2015. There is strong

demand for greater efficiencies within the datacenter IT infrastructure coupled with
increasing pressure to shorten the cycle of delivering new applications to the
business. As we look at this generation, where converged IT infrastructure will shape
enterprise networks from the datacenter to the network edge, unification, integration,
and convergence are criteria that are being looked at favorably by IT and network
managers. Businesses are increasingly adopting mobile applications to communicate
with their employees, enhance business processes, and streamline customer
interactions as well as UC providing the "glue" that unifies customers' UC road map
with their business strategies and processes.

Cross-technology skills
More than 81% of respondents expect networking professionals to need multiple
technology skills. This is a clear indication of the growing importance of networking

©2013 IDC 11
 technologies as a platform to support critical line-of-business systems, applications,
and repositories of data that are found in datacenters across the region.

The challenge of finding qualified staff with cross-technology skills is compounded by

the fact that networking professionals are also expected to demonstrate cross-
disciplinary skills that extend beyond IT into financial and project management to
justify new technology ROI and to manage new installations or upgrades.

Assessment of Networking Skills

As the role and importance of the network within organizations grows, so does the
requirement for skilled IT professionals. Because of the different historical events
previously discussed, skills development within the region has not been growing at
the same rate as demand. This trend is expected to continue and furthermore
increase throughout the forecast period, as technology continues to evolve at an
increasingly rapid pace. Therefore, around the region, it is anticipated that it will be
increasingly more difficult to attract and retain the required numbers of networking-
related staff.

IDC's survey within 8 countries of the region found the following:

 25% of respondents stated that they have hired networking professionals in the
past 12 months.

 A significant proportion of organizations (27%) across the 8 countries surveyed

found it difficult to find networking engineers who have the right skill set to meet
their organizational requirements. The primary reason they find it difficult is the
cost associated with hiring and the expense associated with employing skilled
networking staff. The second reason is the difficulty in assessing the quality of
the applicants.

 Security skills positions are the most difficult to fill. This is because security skills
are increasingly in greater demand throughout the 8 geographies analyzed. 87%
of the companies agreed that they will need extra skills in this area in the next
12-24 months.

Therefore, in order to improve the value of certifications companies should consider

the following elements as potential opportunities for developing more certified
headcount:

 52% of respondents consider that certification will gain more value if they are
sponsored by an association or an educational institution.

 As a second option, Government sponsorship would play an important role as a

driver to increase the value of certifications. This was the opinion of 42% of the
companies interviewed.

©2013 IDC 12
FUTURE OUTLOOK
The Changing Role of IT

IT systems are increasingly perceived as a business differentiator and facilitator

within Latin America enterprises. Organizations across the region recognize that the
corporate IT infrastructure is becoming more important. Indeed, most organizations
now see their network as a critical business tool. More specifically:

 Of the 8 countries surveyed, 58% of respondents believe their network will

become more important in the future.

 Of all respondents interviewed, 52% say that the network is a key platform for
process sharing with key partners, suppliers and customers.

 Employees in 47% of all companies interviewed use the network as a means to

remotely access enterprise systems.

 32% of the firms use their network as a collaborative platform in which

employees interact using specific applications.

In addition to this, emerging technologies such as unified communications, video,

datacenter & virtualization, cloud and mobility are serving to increase the importance
of the role played by the IT platform within organizations of all sizes.

The network has definitely become the backbone of both public and private sector
organizations supporting internal and external communication and business
processes. This is also confirmed by IDC's related market forecast for the Latin
American region. According to IDC's Enterprise Network Systems Tracker:

 Investment in general switching and routing equipment is expected to have a

2011-2015 CAGR of 8%, reaching approximately 25.9 million units in 2015.

 According to IDC forecasts, IP Telephony equipment market will have a 2011-

2015 CAGR of 6%, reaching approximately 2.9 million units in 2015.

 Security and Wireless LAN equipment revenue will increase at a 2011-2015

CAGR of 29%.

 Emerging technologies including Unified Communications, Video, Cloud

Computing, Mobility and Datacenter & Virtualization will increase together at 21%
in market value in 2015. Technologies such as Cloud Computing show the
highest CAGR of 74% thru 2015. Followed by other technologies such as Video
and Datacenter that will grow at a CAGR of 36% and 15% respectively. Finally,
solutions such as Unified Communications and Mobility will increase their value
at average percentages of 8% and 9% respectively.

Total Networking Skills Shortage

In order to provide further insight into the existing and future requirements for
networking professionals across the region, the IDC skills model was used to quantify

©2013 IDC 13
 demand, supply and the subsequent gap. The definition of networking skills includes
all people needed to plan, design, manage, and maintain networking technologies
and infrastructures within an organization.

IDC also used the concept of FTEs to allow direct comparison between countries and
industry sectors. FTEs are staff members that spend 100% of their time on
networking-related activities. Because research has shown that, on average,
networking professionals spend 60% of their time working on networking tasks in the
Latin America region, the IDC model also uses the concept of skilled people that
includes all people with formal training and certifications in essential and emerging
technologies to plan, design, manage and maintain networking technologies and
infrastructures within organizations.

As shown in table 1, IDC estimated that demand for networking skills in organizations
will reach more than 508,300 FTEs across Latin America in 2011. This number
represents the total amount of work that needs to be done in the networking space,
and the number of people that need to be assigned to these tasks – assuming that
they all spend 100% of their available time on networking.

The total of professionals estimated for Latin America includes those for essential and
emerging technologies. Considering these technologies, the undersupply of around
139,800 FTEs in 2011 represented a shortage of skilled people of around 27% in
2011, increasing to 296,200 skilled people by 2015. In percentage terms, IDC
estimates that the total networking skills gap in Latin America will increase 8
percentage points to reach 35% by 2015.

TABLE 1

Total Networking Skills in Latin America (2011 -2015): FTEs

and Skilled People Estimates

2011 2012 2013 2014 2015 CAGR 11-15

Demand 508.316 577.227 649.126 740.666 834.780 13%
Supply FTE 368.548 402.361 442.219 486.064 538.616 10%
Gap FTE 139.768 174.866 206.906 254.602 296.163 21%
Gap % FTE 27% 30% 32% 34% 35%
Skilled People Gap 195.700 244.800 289.700 356.400 414.700 21%

Source: IDC, 2013

Another way to look at the gaps in networking skills is to examine how the sizes of the
forecast percentage gaps for each country compare with one another. Such an
examination provides an interesting ranking of countries (table 2). While the position
of each country in the table is indicative of the situation faced when it comes to skills
shortfalls as a proportion of total demand in each country, it is also important to
examine how the magnitude of the gaps (skilled people estimates) relate to the
relative size of the technology markets that exists in each of these countries. This
provides a clear picture of the challenges ahead.

©2013 IDC 14
TABLE 2

Total Networking Skills Gap Index

2011 2011 2015 2015

Full Time Equivalent Gap (%) Full Time Equivalent Gap (%)
Gap Gap
Argentina 7.936 27% 11.631 31%
Brazil 39.875 20% 117.187 32%
Chile 4.744 23% 14.501 39%
Colombia 6.391 25% 12.403 33%
Costa Rica 1.584 36% 4.338 47%
Mexico 62.749 36% 115.021 41%
Peru 3.692 31% 5.905 37%
Venezuela 2.685 24% 5.137 35%
Source: IDC, 2013

Brazil has the lowest overall networking skills gap in percentage terms, although in
absolute terms the Brazilian gap is the largest. Government related policies and
industry dynamics are important drivers of a well planned technology road map.
Moving talent from different parts of the world is an important factor that has reduced
the capacity gaps in emerging technologies. Despite a seasonal uptick in
unemployment in Brazil, skilled labor remains scarce enough to force employers to
pay more to compete for talent. This, in turn, may fuel inflationary pressure. The
scarcity of qualified labor forced average wages to hit an all-time high in fueling
consumer demand.

Chile has a skilled gap of 6,600 FTEs in 2011, forecasted to increase to 20,300 by
2015. Chile leads technology adoption trends in the region. However, rapid
absorption of technology also has the potential to considerably increase the
networking skills gap.

In Venezuela, government plays an important role as the leading investor in

technology. However, the gap will remain stable given the discrete technology
adoption in the enterprise as a result of the challenging economic environment and
government restrictions.

Colombia is showing the impact of government programs which have promoted the
adoption of technology, especially in small- and medium-sized companies that will be
more demanding of skilled IT professionals. Colombia's steady economy will foster
market growth for the coming years.

Argentina is characterized by a strong education system and high ability to adapt to

technology trends. However, economic cycles in the country exert a pressure in the
demand for professionals and strong competition among them. Professionals need to
offer differentiators which generally must rely on technological capabilities as well as
business skills.

©2013 IDC 15
 Peru will continue to face a significant skills shortage challenge due to its high level of
economic development. Its skills gap of about 5,200 FTEs in 2011 is forecasted to
rise to 8,300 FTEs by 2015.

Costa Rica is an advanced country in terms of technology adoption, albeit a small

country in terms of population and supply of professionals. The constant demand for
professionals will exacerbate the gap in coming years. To meet the needs of
professionals, companies are turning to service providers for increased used of
managed services and to online training for professional training.

In Mexico, the timid involvement of educational institutions on technological needs is

a factor that characterizes the challenges in the industry. In addition, the drain of
trained personnel to other countries like the United States is a factor that exacerbates
the networking skills gap.

Demand for Essential Technologies Skills

The survey conducted by IDC in 8 Latin American countries showed strong intention
for essential technology skills hiring across all countries, industry sectors, and sizes of
organizations analyzed.

According to the IDC economic model, IDC estimates that the demand for essential
networking skills will climb to about 76,800 FTEs by the end of 2011 and reach almost
129,100 FTEs by 2015. This represented a percentage gap of 22% in 2011 and will
be 25% in 2015.

TABLE 3

Total Essential Networking Skills in Latin America (2011 -

2015): FTEs and Skilled People Estimates

2011 2012 2013 2014 2015 CAGR 11-15

Demand 356.957 393.767 432.591 474.589 520.813 10%
Supply FTE 280.186 301.809 328.891 356.573 391.706 9%
Gap FTE 76.772 91.958 103.700 118.016 129.107 14%
Gap % FTE 22% 23% 24% 25% 25%

Source: IDC, 2013

Looking at the specific essential skills in demand, security tops the list with 67% of the
gap focus on security skill shortages. This trend is expected to continue in the next
few years. In 2011, the skills gap in security across the region was of 35,500 FTEs
(38%), and it is expected to rise to 66,900 FTEs (39%) by 2015. Managing security
functions within the network appears as an increasingly mandatory and horizontal set
of skills. Wireless LAN networking skills are also strongly demanded, with an
estimated skills gap of 11,700 FTEs (21%) by 2011, and growing to 20, 900 FTEs
(20%) by 2015. The explosion of mobile devices within the enterprise has introduced
a new dynamic into the enterprise wireless market at an even faster way than
expected five years ago.

©2013 IDC 16
VOIP Networking skills were also found to be very important to organizations in the
region: A gap of 5,500 FTEs skilled people (14%) in 2011 is forecasted to grow to
9,500 FTEs (13%) by 2015. Since 2009, the implementation of VOIP solutions has
not been as quick as anticipated as consequence of other heightened IT investment
priorities and overall negative economic conditions. However, in its place the
transition from existing TDM voice networks to the IP-base environment has gained
speed. As enterprise networks are evolving from fixed, data-centric, client/server
topology to an application-driven, multimedia and mobile platform that is more closely
aligned with business needs than ever before, IDC estimates a continued demand in
this technology along with demands for UC specialists.

Essential networking skills will remain stable within the organization and with a slight
increase during the years. A gap of 24,200 FTEs skilled people (14%) in 2011 is
forecasted to grow to 32,000 FTEs (19%) by 2015. General skills are considered as
the basis to access other specializations within organizations. As a consequence of
the complexity of the network, professionals trying to fulfill new demands of the
market must increase their knowledge of emerging technologies.

TABLE 4

Total Essential Networking Skills Gap Index by Country

2011 2011 2015 2015

Full Time Equivalent Gap (%) Full Time Equivalent Gap (%)
Gap Gap
Argentina 4.016 19% 4.577 19%
Brazil 23.643 17% 50.485 22%
Chile 2.309 16% 6.794 29%
Colombia 3.825 20% 4.278 18%
Costa Rica 1.584 19% 4.338 19%
Mexico 28.934 25% 46.323 29%
Peru 2.412 27% 3.426 32%
Venezuela 1.476 18% 1.954 19%
Source: IDC, 2013

Demand for Emerging Technologies Skills

For the first time, IDC has conducted research on skills gaps of emerging
technologies including: Unified Communications, Video Technologies, Cloud
Computing, Mobility and Datacenter technologies. It is not surprising to note that
these technologies represent the most substantial skills gap in the region, with 45% of
the total of the skills gap in 2011, rising to 56% in 2015.

According to IDC's model, the demand for emerging networking skills climbed to
about 63,000 FTEs by the end of 2011 and will reach almost 167,100 FTEs by 2015.
This represents 42% all FTEs demanded in 2011 and 53% in 2015.

©2013 IDC 17
 TABLE 5

Total Emerging Networking Skills in Latin America (2011 -

2015): FTE and Skilled People Estimate

2011 2012 2013 2014 2015 CAGR 11-15

Demand 151.359 183.461 216.535 266.078 313.967 20%
Supply FTE 88.362 100.553 113.329 129.491 146.911 14%
Gap FTE 62.997 82.908 103.207 136.586 167.056 28%
Gap % FTE 42% 45% 48% 51% 53%

Source: IDC, 2013

Datacenter & virtualization skills remain the most challenging area in terms of finding
skilled professionals. Server virtualization and datacenter are vital in the development
of IT environments and the majority of medium and large organizations in the region
are involved in the transformation of their datacenter in one way or another. The gap
in this field currently accounts for 66% of new technologies, increasing to 70% by
2015. In 2011, the skilled people gap in datacenter and virtualization across the
region was 58,000 FTEs (40%), and it is expected to rise to 162,900 (55%) by 2015.

Trends such as virtualization, driven by the steady preparation for cloud ready
environments and the availability of all types of mobile devices continuously
connected to the network, are creating a series of challenges for IT departments.
These IT departments must figure out how to deal with the increasing complexity of
corporate network infrastructure and how to ensure its reliability and safety while
controlling the rising costs. IDC identifies these gaps in the following technologies:

 Unified Communications. In 2011, the skilled people gap was 7,500 FTEs (35%),
expected to rise to 17,400 (57%) by 2015.

 Video Technologies. In 2011, the skilled people gap was 1,450 FTEs (32%),
expected to rise to 3,200 (31%) by 2015

 Cloud Computing Technologies. In 2011, the skilled people gap was 4,100 FTEs
(46%), expected to rise to 6,300 (27%) by 2015

 Mobility Technologies. In 2011, the skilled people gap was 8,600 FTEs (65%)
expected to rise to 15,500 (74%) by 2015.

©2013 IDC 18
TABLE 6

New Networking Skills Gap Index by Country

2011 2011 2015 2015

Full Time Equivalent Full Time Equivalent
Gap (%) Gap (%)
Gap Gap
Argentina 3.920 47% 7.054 54%
Brazil 16.232 27% 66.702 51%
Chile 2.435 43% 7.707 54%
Colombia 2.566 42% 8.125 56%
Costa Rica 381 42% 1.390 65%
Mexico 33.816 56% 68.699 56%
Peru 1.280 40% 2.480 49%
Venezuela 1.209 44% 3.183 69%

Source: IDC, 2013

Country Analysis

Argentina

Main findings of IDC survey in Argentina include the following:

 Argentina has been largely recognized for its high level of professionals.
Currently Argentina has an improved outlook regarding the availability of qualified
staff with only 17% of respondents indicating difficulty in finding qualified
candidates, the lowest average in Latin America.

 The strong educational system in Argentina enables professionals to adapt and

evolve in accordance with technology trends. However, economic cycles in the
country exert pressure on the demand for professionals and strong competition
among them. Professionals need to offer differentiators which generally must rely
on technological capabilities as well as business skills. The IDC survey showed
that 52% of companies interviewed in Argentina believe that people with
networking skills will become more valuable in the future, the lowest average in
Latin America.

Government plays a very important role in the Argentinean ICT market. Initiatives
from Government to foster some industry segments are very active. Local companies
are positively affected by Government actions to foster investments in industries such
as mobile phones, PCs and electronic assembly. Also, investments in
telecommunication backbones will change the national communication environment.
However, restrictions to currency trade and capital flow along with the increased
restriction to imports in all industries, will add additional pressure to the ICT market
development in the country. The concentration of more companies that manufactured
IT products for internal consumption will demand in the near future more skilled
people. IDC expects the IT market to grow at 11% CAGR 11-15 in Argentina.

©2013 IDC 19
 According to the model, IDC estimated a shortage of approximately 8,000 FTEs
professionals with networking skills in 2011 with this number increasing to 11,700
FTEs by 2015. These figures represent a skills gap (calculated as a proportion of total
demand) of 27% in 2011 and 31% in 2015.

Brazil

Main findings of the IDC survey in Brazil include the following:

 According to survey respondents, Brazil is second only to Mexico in Latin

America in regards to difficulty in finding technically qualified candidates. This is
because it is too expensive to hire and employ skilled networking staff. It is also
important to consider that Brazil recorded the lowest rate of recruitment in
networking professionals with only 19% of companies surveyed having hired
network specialists during the last year. Given this lack of qualified candidates,
IDC considers that Brazilian companies are increasingly obtaining networking
skills from service providers through outsourcing.

Government related policies and industry dynamics are important drivers of a well
planned technology road map. Moving talent from different parts of the world is an
important factor that has reduced the capacity gaps in emerging technologies.
Despite a seasonal uptick in unemployment in Brazil, skilled labor remains scarce
enough to force employers to pay more to compete for talent. This, in turn, may fuel
inflationary pressure. The scarcity of qualified labor forced average wages to hit an
all-time high in fueling consumer demand.

The World Cup and Olympic games that Brazil will host in 2014 and 2016 respectively
are significantly boosting IT investments. Companies and especially the government
are preparing themselves for those events, investing in IT as part of an overall
strategy. The government has recently announced tax incentives on network
equipments (including consumer devices, such as smartphones), along with the
"new" rules for the 4G spectrum auctioning, creating a positive environment for
service providers to invest on network coverage and capacity.

Those factors will contribute to increase the skills gap. Manufacturing output will be
supported by growing opportunities in the domestic and regional markets, but many
segments will suffer from competition from imports owing to a strong currency.
Consequently, Brazilian companies should strive to maintain the competitiveness
level the country has attained by developing a highly trained IT workforce. IDC
expects the IT market to grow at 12% CAGR 11-15 in Brazil.

According to the proprietary skills gap model, IDC estimated a shortage in 2011 of
approximately 39,900 FTEs professionals with networking skills with this number
increasing to 117,200 FTEs by 2015. These figures represent a skills gap (calculated
as a proportion of total demand) of 20% in 2011 and 32% in 2015.

Colombia

Main findings of the IDC survey in Colombia include the following:

 45% of Colombian respondents believe that professional certifications are very

important when hiring networking professionals. Also, companies stated that is
©2013 IDC 20
 difficult to find trained personnel. Colombia ranked in third place among the 8
countries surveyed in finding skilled networking professionals (after Mexico and
Brazil respectively).

 53% of companies consider it very important to certify their staff in the coming
months. As part of the good economic performance that the Colombian market is
experiencing, companies are growing organically and this will impact in the need
of more people with networking skills.

Government has played an import role through subsidizing internet monthly fee
connections for SMBs with the important goal of reducing the digital divide in the
coming years. This has resulted in network expansions to offer services in different
regions, especially in main cities and provinces. In line with this, mobile phone
operators are making significant investments in their platforms to support data growth
rates, for instance technologies such as LTE (Long Term Evolution) are being tested
and deployed. It is noteworthy that 88% of Colombian firms claimed they will need
additional skills in wireless technologies coupled with 94% of companies considering
seeking security skills.

Companies will seek to differentiate themselves through areas such as product

quality, innovation, and pricing which will drive IT investments. The recently signed
free-trade agreements (FTAs) with the US and Canada will allow Colombian
businesses to be more competitive, diversify trade, and attract investment. For these
reasons, IDC expects strong growth rates in SMBs and updates to platforms and
technology. Also, operation and maintenance of the upgraded technology will require
trained professionals whose absence may increase the IT skills gap for the coming
years. IDC expects the IT market to grow at 9% CAGR 11-15 in Colombia.

According to the proprietary skills gap model, IDC estimated a shortage of

approximately 6,400 FTEs professionals with networking skills in 2011 with this
number increasing to 12,400 FTEs by 2015. These figures represent a skills gap
(calculated as a proportion of total demand) of 25% in 2011 and 33% in 2015.

Chile

Main findings of the IDC survey in Chile include the following:

 Chile is the country where more skilled professionals have been hired during the
last year, 36% of companies stated that they increased their professionals by
approximately 20% during the last year. This increase is mainly due to organic
growth in the organizations.

 In Chile a little over one quarter of companies (25%) found it difficult to find
applicants- a percentage under the average in Latin America- confirming the
relative ease in finding networking skilled professionals. 53% of companies
consider certifications very important when hiring. This tendency will continue for
the coming months as 66% of companies will find it valuable for their
organizations to employee certificated professionals.

 Chile leads technology adoption trends in the region. However, rapidly adopting
technology also has the potential to considerably increase the networking skills

©2013 IDC 21
 gap. 66% of companies in Chile believe that it will become more valuable for their
organization in the future that people with networking skills have professional
certification (the second highest perception after Venezuela). Firms also stated
that 87% of enterprises will require professionals with cross technology skills (the
second highest after Costa Rica).

Chile shows strong economic outlook in the coming years. This performance will
positively boost the economic environment including foreign and national IT
investments, which will, in turn influence a growing demand for specialized
professionals thus increasing the requirements and corresponding need for training of
networking professionals. Sectors such as mining and energy will also benefit from
projects to expand their capacity to address the rapid demand in copper foreign
markets. IDC expects IT market to grow at 11% CAGR 11-15 in Chile.

For Chile, IDC estimated a shortage of approximately 4,750 FTEs professionals with
networking skills in 2011 with this number increasing to 14,500 FTEs by 2015. These
figures represent a skills gap (calculated as a proportion of total demand) of 23% in
2011 and 39% in 2015.

Costa Rica

Main findings of the IDC survey in Costa Rica include the following:

 Costa Rica is the country with the highest rate of investment in IT including
networking. One in two companies will invest in IT over the next two years, 47%
of them will make investments in networking.

 The country shows a high incorporation of IT into business. With the highest
average in Latin America, companies in Costa Rica are using their networks to
support more advanced capabilities: 59% of the firms agreed that the network is
a key platform to share processes and establish business relations; 51% of the
companies surveyed use the network as a collaborative platform and for another
49% the network allow their employees to gain access to their organization from
remote locations.

 Costa Rica has the largest skills gap of all the countries surveyed, as a result of
significant technology adoption trends in the country. Also, this is the country with
the highest interest in choosing service providers to outsource certified
professionals. Firms also stated that 89% of enterprises will require professionals
with cross technology skills.

 Certifications will increase in value for the coming months. Nowadays, 39% of
companies worry about professionals having certifications when hiring.
Nonetheless, 55% of the companies will find more value in certified people since
68% of firms have already sent their staff to training courses.

Costa Rica shows the largest gap in skills of all countries analyzed. This country is
considered among the most technologically advanced nations throughout Latin
America. Costa Rica is making strides to close the digital divide which increases the
need for skilled professionals within the country.

©2013 IDC 22
For Costa Rica, in 2011 IDC estimated a shortage of approximately 1,600 FTEs
professionals with networking skills with this number increasing to 4,350 FTEs by
2015. These figures represent a skills gap (calculated as a proportion of total
demand) of 36% in 2011 and 47% in 2015.

Mexico

Main findings of the IDC survey in Mexico include the following:

 63% of companies in Mexico are generally maintaining the amount of investment

in networking. However; companies stated that they will demand more
networking skills.

 Mexico maintains a recruitment rate similar to the region. 24% of companies

hired networking professionals during the last 12 months. 37% of the firms found
it difficult to find networking professionals with the right skills (the highest average
in all countries surveyed). For the near future 57% of companies consider
certifications as a very valuable element for networking professionals.

In Mexico, the timid involvement of educational institutions on technological needs is

a factor that characterizes the challenges in the industry. In addition, the drain of
trained personnel to other countries like the United States is a factor that exacerbates
the networking skills gap.

The government has begun to evangelize the market on the feasibility of obtaining
technology via managed services. Those services such as security and network
management are being well positioned for local service providers, VARs (Value
Added Resellers) and technology integrators. Since 2006, the government has shifted
its focus to spending on IT services rather than buying hardware or software through
the "Austerity Decree". The decree has also established high levels of certification
and standards in the industry, so the ICT Industry has been preparing to deliver
managed services instead of hardware or software. An important growth in the
Mexican IT Services market is thus expected, resulting in skill gap increase as more
professionals will be required to meet services level agreements offered by service
providers. IDC expects the IT market to grow at 8% CAGR from 2011 to 2015 in
Mexico.

In 2011, IDC estimated in Mexico a shortage of approximately 62,800 FTEs

professionals with networking skills with this number increasing to 115,000 FTEs by
2015. These figures represent a skills gap (calculated as a proportion of total
demand) of 36% in 2011 and 41% in 2015.

Peru

Main findings of the IDC survey in Peru include the following:

 In Peru, one in two companies is expected to increase their budget in networking

mainly because of organic growth in the organizations. The necessity to invest in
updating infrastructure and strengthening the network is notably growing.

 As a result of the growth that this country is experiencing, 88% of companies

seek to understand how the network can enable and impact their business.

©2013 IDC 23
  Gradually, Peru is requiring more qualified staff; however it is beginning to
experience a gap that could increase in the next years.

The economic stability in Peru has attracted foreign direct investment and also has
encouraged domestic investments in all verticals mainly Mining, Government,
Finance, Services, Telecommunications and Commerce. Telecommunications
companies are penetrating and growing steadily. There are plans to build a dorsal
fiber optic and tenders for LTE (Long Term Evolution) networks to accelerate the
mobility scenario in the country. The need for IT infrastructure to sustain the operation
and maintain levels of customer service is driving investment and modernization of
infrastructure. Companies are embracing the adoption of new technologies and other
entities such as government are playing an important role in initiatives that drive IT
investments. IDC expects the IT market to grow at 7% CAGR from 2011 to 2015 in
Peru.

In 2011, IDC estimated in Peru a shortage of approximately 3,700 FTEs professionals

with networking skills with this number increasing to 5,900 FTEs by 2015. These
figures represent a skills gap (calculated as a proportion of total demand) of 31% in
2011 and 37% in 2015.

Venezuela

Main findings of the IDC survey in Venezuela include the following:

 Venezuela reports the highest interest in certified professionals with 64% of

respondents indicating that it is very important to have people with networking
skills when hiring. 68% of firms stated there is a high interest in future training of
staff in the area of networking. This is because half of companies surveyed
recognized that new products and technologies require more staff.

In Venezuela, the government plays a very important role. Over time different sectors
have grown to depend on government as a result of expropriations made in banking,
telecommunications, retail, resulting in the decrease of private sector. The control of
monetary exchange rate continues to be the main inhibitor of the market. Challenging
administrative procedures are required to access to foreign exchange rate with the
Currency Administration Commission (CADVI, Comisión de Administración de Divisas
for its acronym in Spanish) and the Transaction System for Foreign Currency (SITME,
Sistema de Transacciones con Títulos en Moneda Extranjera for its acronym in
Spanish) entities. To avoid exchange rate procedures, companies have outsourced IT
infrastructure and thus overcome limitations in acquisition of hardware and software.
IDC expects the IT market to grow at 9% CARG from 2011 to 2015 in Venezuela.

IDC estimates for Venezuela a shortage of approximately 2,700 FTEs professionals

with networking skills with this number increasing to 5,200 FTEs by 2015. These
figures represent a skills gap (calculated as a proportion of total demand) of 24% in
2011 and 35% in 2015.

©2013 IDC 24
CHALLENGES/OPPORTUNI TIES
The future of business communications is one of large scale transformation driven by
global macroeconomic conditions, technology advancements, and the evolution of
societal trends. Firms today, more than ever, need greater agility, flexibility, and
collaboration to compete for new customers and partners and extend existing
relationships. This transformation has brought important changes that have impacted
the demand for more skilled professionals especially in areas that we have called
emerging technologies.

Undoubtedly, the focus that should be given to technologies such as security and
datacenter is critical to the operation of business. Security is an area that requires
intensive knowledge as a result of new threats that could impact business
development. This also applies to datacenter management, as the cornerstone for the
next third platform described earlier in this document.

While the market continues to pressure IT departments in the short term to optimize
the use of existing assets and focus on rationalization, long-term competitive
advantage requires a radical rethink of the existing model; a deeper focus on
innovative approaches; and most critically, aligning communications strategy closer to
users and business performance. This factor is demanding in some countries (ex.
Argentina, Costa Rica) not only technically-skilled professionals but also an
increasing knowledge of how to align technology with business goals.

Some verticals in the short term will face a greater networking skills gap. Government
as enabler of value projects will need to find sufficient skilled staff for their own
projects. Vertical specialization is a critical factor in sectors like education, health and
even retail. Some sectors such as financial are demanding highly specialized
professionals to deploy new solutions. As a result of the increase in the networking
skills gap, actions such as linking IT needs to educational institutions as well as
promoting incentives to encourage employers to invest in skills development are still
needed.

CONCLUSION
IDC has identified an increasing gap between the demand for skilled networking
professionals and the number of professionals that are available throughout the
region.

According to the surveyed end-user organizations, IDC discovered that vendor

certification represents a business differentiator; however, economic factors as well
as business strategies/culture determine the number of professionals that receive
formal training and have a certification. There are currently significant lags in
professional networking skills to meet the technological challenges that are extended
especially in emerging technologies.

Salary compensation for having better skills and technological readiness is not a
common practice in companies in the region. Since qualified individuals are not paid
more than those that are unqualified that factor leads qualified individuals to leave
(brain drain) making it challenging to find or retain truly qualified workers. The effects

©2013 IDC 25
 for this issue are that some organizations may find it difficult to take advantage of new
technologies because of the lack of skilled professionals.

There are two factors to be considered. Organizations are still looking for people with
cross-technology and cross-functional skills. Nonetheless, other specializations,
especially those in security and datacenter, are becoming indispensable as well as a
good knowledge of vertical solutions. In order to correctly address these challenges,
IDC recommends the following:

Product strategy

 Focus product development by country considering necessities for each country

to reinforce essential, emerging and cross technologies´ training.

 Make security course a module embedded within essential technologies’ training

 Further develop channels to market for technical education by putting greater

focus on e-learning and training through business partners

 Develop special programs for service providers’ staff so that they can provide
certified support to their final customers

 Consider including further soft-skills training, especially the ability to analyze

business impact

Communication strategy

 Educate businesses in the fact that value to the organization is created through
knowledge

 Raise awareness by participating in industry events and education forums

 Promote benefits of certification, highlighting impact on business results

 Develop special campaigns focused on telecom and media sectors

Alliances and Partnerships

 Local educational institutions: Diversification between technical and business-

oriented universities / post-graduate programs is highly desirable

 Local governments: Consider embedding programs as part of digital agenda

plans

 Consider a joint communication effort with large VARs (Value Added Resellers)
and System Integrators (i.e. Dimension Data, Promon Logicalis, etc.) to expand
competency programs to their own partner ecosystems

©2013 IDC 26
APPENDIX

IDC's Proprietary Skills Model

This document describes the methodology behind IDC's skills model, which forms the
basis for developing networking skills demand and supply. The document further
describes the data sources and official statistics that have been used as input into this
model.

During the late 1990s and early 2000s, IDC was commissioned to provide
assessments and forecast of the demand and supply situation for skills in the network
technology arena across different regions around the world. This 2012 study aims at
updating the former analysis, furthermore accounting for arising technology solutions
that were not evaluated in previous 2007 analysis. The networking market is
experiencing an important shift driven mostly by the implementation of collaboration,
video, datacenter & virtualization, cloud and mobility, and there is a real need for
quickly attracting new talent into the market in order to fulfill demand.

As important factors and assumptions had changed dramatically since the original
model was constructed in the late 1990s, such as lower growth expectations to both
country GDP and IT spending overall, a new model that reflects these changed
environments has been constructed, the methodology of which is described below.

Model Methodology
In addition to collecting data through the survey, IDC used its Skills Model to provide
quantitative data to assist in developing an accurate picture of existing and future
demand for networking professionals.

To ensure the accuracy of the model's outputs, and allow results to be compared
across countries, the following criteria were followed:

 Only statistical information from reputable sources was used. These statistics
must have been available in a wide range of countries to ensure consistency.

 The model must take into account economic developments in each country,
based on both historical data as well as forecasts from IDC trackers: Latin
America Enterprise Networks Systems Tracker, Latin America IT Services
Tracker, Latin America Unified Communications Tracker, Latin America Software
Tracker, Latin America Business ICT Tracker, Latin America Cloud Computing
Technologies, Latin America Server Virtualization Tracker, Latin America
Emerging Markets Tracker, Latin America Mobile Devices Tracker, Latin America
Security Appliances Tracker, Latin America PC Tracker, and Worldwide Black
Book. It must also take into account employment and unemployment rates in
Latin American countries.

 The model must take into account enrollment and graduate data for higher
education as these are indicators of current and future potential skills availability.

©2013 IDC 27
  The model must form part of a holistic view of the IT technology and workforce
markets to ensure that there is no "sub-optimization."

As a first principle in developing the model, IDC established 2011 as a baseline year,
since several factors are known or, at a minimum, have high confidence factors
attached, e.g. GDP in each country, employment/unemployment rates, IT spending,
IT services spending on network and security related services, network and security
related shipment data and others.

Forecast for supply and demand of skills have then been developed based on several
data points and predictions from IDC and recognized international sources.

Assumptions
As with any forecast and model exercise, several assumptions have to be made, the
accuracy of which can usually only be established with a hindsight view.

Several occurrences can affect the forecast:

 Better or worse economic conditions in the countries than are currently expected.

 Sudden technology shifts (and therefore have not already been taken into
account in IDC's forecasts),

 Government policy changes that support or suppress IT spending (examples of

existing policies are regulatory changes, austerity decrees, nationalization acts or
others)

 Improved performance of the IT services sector, which will stimulate demand for
skills – and as experience has shown – attractiveness of IT-related education.

However, it is IDC's opinion that the model and the underlying assumptions are sound
and realistic at the time of publication of the data.

Glossary

The definition of networking skills used in the model is: people needed to plan,
design, manage and support the networking technologies in the organization. The
definition of skills needs to be broad due to the proliferation of networking
technologies in organizations of all sizes. IDC further uses the following two
classifications of skills:

 Full Time Equivalents (FTEs): IDC's model is based on assessing the demand
and supply of full time equivalent networking skills, since this provides the most
reliable foundation for modeling. Full time equivalents are defined as spending
100% of their time working with the networking technology.

 Skilled People: However, it is clear that most people with networking skills do not
spend 100% of their time working with networking technologies. On average,
staff with networking skills also performs peripheral tasks, including PC software
and hardware installation, and desktop support. Consequently, for this study, IDC

©2013 IDC 28
 defines skilled people as people that have, as part of their job function,
involvement in the planning, design, management and support of networking
technologies.

 Skilled People Gap: This is the number of skilled people needed to close the
skills gap.

 Labor supply: Forces relating to the expertise or skills needed to support the
market, such as IT or telecommunications engineers, technical support
specialists, field engineers, product developers and designers, managers and
other professionals, and skilled implementers. At the beginning of some
markets, the availability of skilled professionals may be a gating factor -- e.g.,
Professionals with networking skills in the market for IP Communications or data
and RF engineers in the implementation of wireless networks.

 CAGR: Compound Annual Growth Rate or Cumulative Annual Growth Rate.

 Service Provider: A company that transports information electronically. This

category includes Telecommunication Service Providers (TSP), Competitive
Local Exchange Carriers (CLEC), Long Distance Carriers (LDC), Internet Service
Providers (ISP), Value Added Resellers (VAR), Local Exchange Carriers and
Mobile Service Providers.

Copyright Notice

External Publication of IDC Information and Data — Any IDC information that is to be
used in advertising, press releases, or promotional materials requires prior written
approval from the appropriate IDC Vice President or Country Manager. A draft of the
proposed document should accompany any such request. IDC reserves the right to
deny approval of external usage for any reason.

Copyright 2013 IDC. Reproduction without written permission is completely forbidden.

©2013 IDC 29