Latin America data center colocation market is expected to grow at a CAGR of 6.15% during the period 2022-2027
The factors driving the market are: • Increased deployment of submarine cables. • Booming digital economy in Latin America. • Tax incentives improving data centers.
New York, June 24, 2022 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Latin America Data Center Colocation Market – Industry Outlook and Forecast 2022-2027” – https://www.reportlinker.com/p06288151/?utm_source=GNW
• COVID-19 drives demand for data centers
KEY STRENGTHS OF THE DATA CENTER COLOCATION MARKET IN LATIN AMERICA
• Some of the major drivers for the growth of the Latin America data center colocation market include increased digitalization in multiple countries, large-scale cloud service provider colocation data centers, and growth in connectivity.
• Some colocation data centers are developing wholesale colocation space at their facilities in multiple countries to meet the growing demand for colocation from cloud service providers such as Microsoft, Oracle, IBM, Google, Huawei, AWS and government entities .
• Computing power in data centers has increased dramatically due to an increase in demand for cloud services, big data, and IoT, which has led to an increase in rack power density. Increased data bandwidth and high performance computing will challenge data center operators to have an efficient infrastructure to handle any downtime.
• COVID-19 has been a boon for the entire industry, accelerating digital transformation initiatives across Latin America, increasing demand for data center services and driving capacity utilization among data center facilities. flatsharing
• The market is attracting investment from cloud service providers such as Google, Amazon Web Services, Microsoft, Oracle, IBM and Tencent. These providers will continue to drive colocation demand in the region during the forecast period.
• Governments in the region are contributing to the growth of data center construction by offering several types of tax benefits.
• The region is experiencing significant connectivity initiatives with growth in submarine cable deployments. In Latin America, Brazil, Chile, Colombia, Argentina, Peru, Uruguay, Venezuela, Mexico, Ecuador and other Latin American countries have cable connectivity under -marine, connecting Europe, Africa and the United States.
In 2021, local and global operators dominated the market through retail colocation and construction activities. However, the presence of cloud service providers is gaining traction and is expected to boost wholesale colocation in the region. Brazil, Chile and Mexico are experiencing growth in demand from cloud service providers; the wholesale colocation market is therefore flourishing in these countries.
The data center colocation market in Latin America is seeing significant growth in the purchase of lithium-ion UPS systems. Most edge plant deployments will include single-phase lithium-ion UPS systems and monitored and switched PDUs. Hence, the emergence of edge facilities will significantly boost the growth of the market.
Data centers are investing more in electrical infrastructure with minimal N+1 redundancy. Most installations are installed with N+N or 2N redundancy for the electrical infrastructure with more redundancy for UPS systems and generators. AECOM, Aceco TI, Constructora Sudamericana, Fluor Corporation, Holder Construction, Jacobs Engineering Group, Quark and ZFB Group are construction contractors building data centers in Latin America.
Segmentation by colocation service
• Retail Colocation
• Wholesale colocation
Segmentation by infrastructure
• Electrical infrastructure
• Mechanical infrastructure
• General construction
Segmentation by electrical infrastructure
• UPS systems
• Transfer switches and switchgear
• Electrical distribution units
• Other electrical infrastructure
Segmentation by mechanical infrastructure
• Cooling systems
• Other mechanical infrastructure
Segmentation by cooling systems
• CRAC and CRAH units
• Cooling units
• Cooling towers, condensers and air coolers
• Economizers and evaporative coolers
• Other cooling units
Segmentation by general construction
• Core and shell development
• Installation and commissioning services
• Engineering and building design
• Fire detection and extinction
• Physical security
Segmentation by Standard Level
• Level II
• Level III
• Level IV
KEY INDUSTRY TRENDS
Focus on automation and AI in data centers is gaining traction
• In Latin America, almost 80% of large companies use AI technology. It is expected that by 2022, AI will be implemented in 21-40% of companies. Many Latin American countries have developed or are developing national AI plans, but political volatility is interrupting the strategy
• The adoption of AI technology is significant in various industries, including data centers. Infrastructure maintenance requires preventing operational failures by automating data center facilities. UPS systems waste energy for energy storage by converting AC to DC and vice versa
• The data center colocation market in Latin America has attracted significant investment in recent years, led by countries such as Brazil, Chile, Colombia and Mexico, with emerging locations such as Uruguay , Bolivia, Argentina and Peru.
• In 2021, Brazil was the main shareholder in terms of market share according to investments with around 58%, followed by Mexico with a share of around 28% in 2021.
• The Mexican data center colocation market will witness an increase in area with an absolute growth rate of 41% between 2022 and 2027. In 2021, Mexico held an industry share of approximately 27% in terms of adding electrical capacity.
• In terms of revenue, the main revenue generation was seen in Brazil through several local and global data center operators such as Equinix, Ascenty, ODATA and Scala Data Centers.
• Significant demand came from sectors such as telecommunications and internet service providers for co-location of data center facilities in the region.
• Global colocation providers compete through strategic partnerships with local businesses, government and telecommunications service providers. For example, global colocation data center operator Equinix entered the Mexican market after acquiring Axtel’s business.
Segmentation by region
• Other Latin American countries
• Major colocation operators in the Latin American colocation market include Ascenty, Claro, Equinix, HostDime, ODATA, Scala Data Centers, Millicom (Tigo) and others.
• Vendors are increasing their presence in Latin American countries, which should drive revenue growth, primarily due to increased construction of large data centers in Brazil, Chile, Colombia and Mexico.
• The market is expected to see more mega data center builds to meet wholesale colocation demand by cloud service providers, which is likely to add revenue opportunities for infrastructure providers in their business segments. respective operation.
• Many operators also adopt units from different suppliers to provide efficient cooling solutions for the installation.
• Many data center operators depend on local resellers and qualified local expertise for installation, commissioning and maintenance services. Several infrastructure vendors in the market offer specific products or a full range of infrastructure solutions suitable for Latin American data centers.
• Data center construction is increasing significantly and new data center development is increasing year-on-year and witnessing strong contribution from Latin America modular data center market.
• The region has the presence of global and local construction, engineering and architectural firms. The growth of the data center market will provide opportunities for local contractors in construction, engineering and architecture verticals.
Top Support Infrastructure Providers
• Assa Abloy
• Axis communication
• Bosch security systems (Robert Bosch)
• Delta Electronics
• Daikin Applied (Daikin Industries)
• Generac power systems
• Honeywell International
• Johnson Controls
• Electric Mitsubishi
• Piller Power Systems
• Rolls Royce
• Schneider Electric
Renowned construction contractors
• Aceco IT
• Constructora Sudamericana
• Fluor Corporation
• Stand construction
• Jacobs Engineering Group
• ZFB Group
Top Data Center Investors
• AVA Telecom
• GTD Peru
• IPXON networks
• Lumen Technologies
• Scala Data Centers
• Millicom (TIGO)
ANSWERS TO KEY QUESTIONS
1. What is the size of the data center colocation market in Latin America?
2. What is the growth rate of the data center colocation market in Latin America?
3. What is the value of the Latin America data center colocation market size based on power capacity?
4. Which country had the largest data center colocation market share in Latin America in 2021?
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