Latin America Data Center Market - Industry Outlook & Forecast 2023-2028

Latin America Data Center Market - Industry Outlook & Forecast 2023-2028

The Latin America data center market is expected to grow at a CAGR of 8.14% from 2022 to 2028.

KEY HIGHLIGHTS

• Regional governments initiate schemes and incentives to attract investments in the Latin America data center market. A free trade zone (FTZ) is introduced in Columbia. Similarly, Patagonia is an emerging data center hub in Chile, as the government plans tax incentives to develop data centers.
• Major contributors to green data center development include Brazil, Chile, Argentina, and Paraguay, among others, wherein data center operators and governments work on adopting renewable energy and other such measures.
• Hyperscale operators in Latin America, including Google, Microsoft, Amazon Web Services (AWS), and Huawei Technologies, drive the market in terms of sustainable investments and innovative technologies.

MARKET TRENDS & OPPORTUNITIES

Adoption of Cloud

Latin America is one of the fastest-growing countries regarding technological development and innovations. The adoption of the cloud fuels data generation and the growth of the technology market. The government takes several initiatives for the growth and development of the cloud. Microsoft, Oracle, IBM, and Huawei Innovation announce new cloud regions/availability zones in Latin America. Some of these cloud regions are already operational, and others will open within the next one to two years.

Implementation of Automation & Artificial Intelligence in Data Centers

The adoption of smart devices and the growth in demand for AI and machine learning prompt several investments in the Latin America data center market. Moreover, adopting AI technology is significant in various industries, including data centers. Infrastructure maintenance prevents operational failure with the automation of data center facilities. UPS systems use power for energy storage by converting alternating current (AC) to direct current (DC) and vice versa.

Adoption of Renewable Energy

Many renewable energy sources are present across different countries in Latin America, which can help bring energy efficiency to facilities in the Latin America data center market. Further, the increase in average industrial electricity pricing across Latin America, in combination with the increased push toward sustainability, prompts operators to focus on renewable energy procurement through power purchase agreements (PPAs). Several operators in Latin America either procured or signed PPAs to power their regional facilities.

SEGMENTATION ANALYSIS

Segmentation by Facility Type

• Hyperscale Data Centers
• Colocation Data Centers
• Enterprise Data Centers

Segmentation by Infrastructure

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by IT Infrastructure

• Server Infrastructure
• Storage Infrastructure
• Network Infrastructure

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• PDUs
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers, and Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Segmentation by Cooling Technique

• Air-based Cooling
• Liquid-based Cooling

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

REGIONAL ANALYSIS

• Brazil has multiple colocation providers, such as Ascenty, Scala Data Centers, and ODATA. Several telecom providers, such GlobeNet Telecom, Ava Telecom, and Embratel, have expanded their presence in the country. Colocation operators lead investments in the country. They are expected to grow further with several new project announcements.
• The Latin American data center colocation market witnesses investments in submarine cable projects, connecting with other regions and countries. Mexico City is the primary data center location in Mexico, with eight existing third-party data centers. Cancún, Mexico, is one of the major locations for submarine cable landing, with three active submarine cables and three upcoming projects.
• Colombia witnesses the deployment of trial phases of 5G network connectivity with investment for trial from Nokia, AngloGold Ashanti Colombia, and others.
• Due to its strategic location, Santiago is a major Chilean city that has witnessed data center development. Most operators in Chile, such as ODATA, Ascenty, and EdgeConneX, operate facilities in Santiago.

Segmentation by Geography

• Brazil
• Mexico
• Chile
• Colombia
• Rest of Latin America

VENDOR LANDSCAPE

• Ascenty (Digital Realty), ODATA, Equinix, HostDime, CloudHQ, and Scala Data Centers are significant vendors in the Latin America data center market.
• Several mergers & acquisitions (M&As) occur among colocation vendors in the Latin American data center industry. For instance, in 2022, Equinix announced that it acquired around four data centers of Entel in Chile and Peru. In December 2022, aligned announced an agreement to acquire ODATA, which marks its entry into Latin America.

Prominent IT Infrastructure

• Arista Networks
• Broadcom
• Cisco Systems
• Dell Technologies
• Hewlett Packard Enterprise (HPE)
• Huawei
• IBM
• Juniper Networks
• Lenovo
• NetApp
• Oracle

Prominent Support Infrastructure

• ABB
• Alfa Laval
• Assa Abloy
• Axis Communications
• Bosch Security Systems (Robert Bosch)
• Caterpillar
• Cummins
• Daikin Applied
• Delta Electronics
• Eaton
• Honeywell
• Johnson Controls
• Legrand
• Munters
• Mitsubishi Electric
• Piller Power Systems
• Panduit
• Rittal
• Rolls-Royce
• Schneider Electric
• Siemens
• STULZ
• Vertiv

Prominent Support Infrastructure Providers

• AECOM
• Aceco TI
• Constructora Sudamericana
• Cundall
• Fluor Corporation
• Gensler
• HDOS
• Hyphen
• Holder Construction
• Jacobs Engineering
• KMD Architects
• PQC
• Quark
• Syska Hennessey Group
• Turner Construction
• Turner & Townsend
• ZFB Group
• Zeittec

Prominent Data Center Investors

• AWS
• Ascenty
• Ava Telecom
• Air Link Communications
• Belize Network Information Centre
• Blue NAP Americas
• Brac Informatics Centre (BIC)
• Claro
• Digicel
• Entel
• Epic.io
• Equinix
• EdgeConneX
• GlobeNet Telecom
• Gtd Perú
• HostDime
• InterNexa
• IPXON Networks
• KIO Networks
• Lumen Technologies (Cirion)
• Millicom (Tigo Panama)
• Nabiax
• ODATA
• Oxygen
• OneX
• Scala Data Centers
• SONDA
• Telecom Italia Sparkle

New Entrants

• CloudHQ
• DHAmericas
• Microsoft

KEY QUESTIONS ANSWERED:

1. How big is the Latin America data center market?

2. What is the growth rate of the Latin America data center market?

3. What is the estimated market size in terms of area in the Latin America data center market by 2028?

4. What are the key trends in the Latin American data center industry?

5. How many MW of power capacity is expected to reach the Latin America data center market by 2028?
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