Anderson Quirino, Vertiv Latin America Sales Team Leader, stresses the importance of colocation data centers to the Latin America region. “It is essential that, in 2021, these centers advance in terms of availability, connectivity and energy efficiency,” he says.
Digital Transformation is a factor that drives the economy of Latin America and colocation data centers are fundamental elements in this strategy, with a direct effect on regional GDP.
According to a study published in 2020 by IDC Latin America, 40% of the region’s GDP will consist of digital businesses by 2022. This will require IT spending of up to US$460 billion. Of this total, 35% will be invested in cloud computing solutions.
A study by the research institute, Aritzon, also conducted in 2020, corroborates this trend. The company points out that, by 2026, the data center market in Latin America will reach US$780,000 million.
Where there are digital businesses, there are also colocation data centers, the most prosperous segment in the critical digital infrastructure space. According to Data Center Map, there are more than 150 colocation data centers in operation today, from Mexico to the southern region of South America.
A data center that offers colocation services offers its clients an exclusive space with all the infrastructure to receive the hosting racks with servers, routers and others from the user company. This infrastructure includes energy solutions, thermal systems and environmental monitoring software, which are vital technologies for the continuity of data center operations.
Hyperscale sites reach Chile, Colombia and Mexico
Hyperscale data centers operated on the colocation model host the largest cloud providers on the planet. The demand for space in these data centers is such that, in some cases, it requires the construction of huge works of approximately 5,000 square meters.
According to AFCOM, the American Association of Data Center Professionals, these are large, hyperscale data centers. Mega sites are up to 22,000 square meters. In Latin America, the expansion movement of hyperscale colocation data centers began in Brazil and, throughout 2020, progressed towards Chile, Colombia and Argentina, and continues with the construction of units in other Latin American countries, such as Mexico.
Many data centers are owned by large companies that want to ensure the consistency of their infrastructure throughout Latin America. These service providers are certified as Tier IV or Tier III.
Uptime Institute certifications are the standard for the global data center project, construction and operation market. Tier levels are tailored to business needs, with higher levels required by the infrastructure to provide greater redundancy and fault tolerance. Maintaining these seals requires excellent and on-going management, regardless of where the hyperscale colocation data center is located.
The demand for homogeneous and high availability processes by the Latin American data center industry is leading the large colocation sites in the region to require a regional, and not a local, perspective from their suppliers in relation to their critical infrastructure.
The rate of expansion of this type of work is so rapid that some suppliers are remodeling their internal processes to fully perform as a customer-centric company. In this model, all internal teams – engineering, projects, logistics, services, finance and human resources – have a single focus: anticipating and solving the current and future needs of colocation data centers, an ever-evolving environment.
ISPs and telecom operators are also competing for this market
In recent years, colocation data centers of various sizes, implemented by telecommunications providers and ISPs (Internet Service Providers) are also multiplying. It should be noted that a colocation site considered small today is four times the size of what a small colocation data center was 10 years ago.
The growing adoption of Edge Computing solutions in Latin America will contribute to the number of co-location data centers increasing even further. According to the study The Data Center 2025: Closer to the Edge of the Grid, conducted in 2019 by Vertiv and based on interviews with 800 data center managers, the number of computing sites in the Edge grows by 226% by 2025 (global data).
With the development of 5G networks and the growth in demand for data processing close to the point of data consumption, this expansion will be even greater. By the end of this decade, thousands of these centers are expected to exist in Latin America.
São Paulo, Rio de Janeiro, Buenos Aires and Mexico City are the regional centers
In terms of geography, the expansion of colocation data centers can be seen in all regions. The presence of these data centers has been a reality in Brazil for several years – 65 sites, according to Data Center Map. Recently, countries like Peru, Uruguay and Paraguay are also working on co-location projects.
An Equinix study, published in April 2020, shows that in Latin American cities, 90% of the data processed by their colocation data centers in the region passes through São Paulo, Rio de Janeiro, Buenos Aires and the City of Mexico.
The expansion of colocation data centers in Latin America continues to face challenges. The competitiveness of these companies depends more and more on the optimization of energy consumption. A study conducted by the US government in 2016 showed that data centers were responsible for 1% of total electrical energy consumption in that country.
According to a survey conducted by the Uptime Institute, electricity accounted for up to 44% of a data center’s operating expenses. For co-location sites, energy efficiency plays an essential role in competitive pricing of services. Advanced critical infrastructure and thermal systems are part of the solution for efficiency. Thermal efficiency options that are gaining popularity include evaporative coolers and solutions that use water and air cooling simultaneously. These new technologies have been increasingly adopted by colocation data centers in Brazil, Chile and Colombia.
Due to the high cost involved in the construction and operation of data centers, there is a growing demand for prefabricated data centers, designed, assembled and tested in Brazil, and exported to countries in the region. Prefabricated data centers reduce the time between design and implementation to four to five months, which improves the return on investment of these projects.
Continuous optimization – A colocation data center challenge
Another big challenge is optimizing the critical infrastructure of the colocation data center. Our region has teams of professionals trained and certified in data center management and project best practices – experts who already support dozens of colocation data centers in multiple countries. Brazil, Chile, Colombia, Mexico and Argentina, among other countries, trust these qualified professionals, who collaborate and share knowledge.
All data centers are fundamental, and the data center is decisive for the success of thousands of Latin American companies. It is essential that, in 2021, these centers advance in terms of availability, connectivity and energy efficiency. This will determine the future of our region’s digital economy.