MSP Today Expert Feature
May 22, 2014

The Brazilian 'Blow-up': Global Data Demand Driving Data Center Growth in LATAM Region

By TMCnet Special Guest
Scott Charter, Co-Founder and Co-Managing Director, MOD Mission Critical

New data centers are popping up all over Latin America.  The days of sending all data and storage requirements back to Miami’s NAP of the Americas are over.  According to DCD Intelligence, the research division for Datacenter Dynamics, demand for data center co-location facilities in LATAM is growing at such a staggering rate that it may outstrip the available space.

In 2013, Brazil added an additional 22,400 square feet of additional co-location space.  DCD reports also forecast the addition of 11,800 new square feet of space in Chile and another 10,520 in Colombia.  The Uptime Institute’s 2013 Data Center Industry Survey shows Latin America having twice as much growth as expansion in Europe and North America, however the builds are on a smaller scale, typically under 1MW per facility.

However, building new data center space is hardly ever a simple process, especially in Brazil. While Brazil is growing at a rapid pace, due to not only 2014 FIFA Football World Cup and 2016 Olympic games in Rio de Janeiro infrastructure, but also to an expanding shift into other industries requiring data compute and storage, Brazil also is a bureaucratic nightmare.  During a recent trip to São Paulo, I saw firsthand the difficulties of starting a business, importing equipment and tracking down local, state and national licenses.  

Therefore, building in Brazil is rated as very risky; so risky, in fact, that global real estate consulting firm Cushman & Wakefield has included the country in its list of high-risk locations for new data center construction.  This increased demand for data, compounded by prevailing risk in building new facilities, is spurring the movement towards multi-tenant, carrier-neutral facilities.  

While competition grows in Chile, Columbia, Brazil and Mexico in new data center facilities, costs to co-locate are still much higher than typical rates in Canada or the United States.  Without sufficient domestic competition, along with domestic demand in these markets, pricing for colocation does not come cheap (or even price aggressive) in most of Latin America.  Finding bargains can be tough.  This is why unique buying strategies, such as Colo by the ‘U’, make sense for international data clients needing a small footprint in select Latin American markets.

Most traditional data center providers do not offer anything less than half a cabinet of colocation space.  Colo by the ‘U’ is addressing this void by providing customers with flexible, scalable and cost-effective Colocation options by the ‘U’, or unit – approximately 4.445 cm of vertical cabinet space in a typical full-size 42U cabinet.  This allows companies to customize their colocation requirements from 1U on up, eliminating the need to overbuy space and enabling them to pay only for what they require.

Edited by Alisen Downey