Latin America

1 Argentina, Buenos Aires

Data centre market context

Buenos Aires, a metropolitan area of 14 million people, is the business centre of Argentina, featuring major trade, financial services, industrial, education, tech start-ups, agriculture and transportation activity.

The city has low natural disaster risks but, like São Paulo, does have a fluctuating economy with increasing utility rates.

According to Cloudscene.com, the city area has only minimal data centres and service providers, though research shows Equinix, Neolo, Inter.net, Telecom Argentina, Ringo DCI, G2K and Skyonline to be operational there.

Construction market conditions and publicly known projects

With minimal known data centre construction in 2018, the market is cold, but as an emerging market to watch.

According to Bloomberg, “Argentina is in the running along with Chile to be the site of a new data centre for Amazon.com Inc. This is a good sign for Argentina‘s economic recovery with much-needed foreign investment.”

Seaborn Networks' subsea cable will soon be connecting Buenos Aires with São Paulo and Santiago. EdgeConneX' edge data centre will serve as a point-of-presence as early as the first quarter of 2019.

According to EdgeConneX, this data centre has the perfect location and access, as it will serve as a hub to hundreds of national and multinational companies at Parque Industrial Pilar. It will add 10MW to the region in the fourth quarter of 2018.

2019 outlook

Though the data centre construction market has been cold in 2018, it is showing every sign of heating up in 2019, with new fibre connections encouraging investment in the Argentinian data centre market.

2 Brazil, São Paulo

Data centre market context

The potential market in Brazil is great, with a population of over 200 million citizens. São Paulo is the financial hub and economic engine behind the nation.

Despite the low natural hazard risks and dense population, the data centre market as we know it is relatively new in Brazil, with large-scale colocation facilities only recently established.

The limited infrastructure, high taxes, an economy known to fluctuate, and a difficult construction market can all influence foreign investment.

Construction market conditions and publicly known projects

Brazil has featured heavily in recent mergers and acquisitions and joint ventures, and this brings investment that could take today’s cold data centre construction market conditions to warm very quickly.

Equinix's acquisition of Verizon’s assets includes the IBX site, SP3, which is expected to grow to 13.3MW.

IBM and Equinix have announced a partnership to expand cloud services in Brazil. This will ensure cloud access and growth in the region through to 2022.

Construction is understood to be underway for new subsea fibre landing stations, and associated “edge” facilities to bring a point-of-presence.

The largest news this year has been the acquisition of Ascenty by Digital Realty. Ascenty is the largest data centre provider in Latin America, heavily centred in São Paulo. It also owns its own fibre network. Its most recent construction will add another 20MW to the market in the second quarter of 2019.

2019 outlook

With the trend of mergers and acquisitions, limited natural hazard risks and the arrival of several new fibre landings in Brazil - that give it direct access to the US – the future of the data centre market in São Paulo looks bright.

 

3 Chile, Santiago

Data centre market context

Santiago as we know is a high seismic risk, but has few other potential natural disasters. Electrical grid and distribution is well established. Santiago has a higher number of free cooling days than the competing Latin American hubs of Buenos Aires and São Paulo.

As far as a fibre infrastructure is concerned, the region was strengthened by the landing of a subsea cable, and Andean Tower Partners, a Digital Bridge company, acquiring the Torres Unitas telecommunications business. This is a great sign for connectivity and financial investment in the region.

Another positive for the region is Telefónica building a robust and modern data centre just outside Santiago. This data centre is tied into the Telefónica global network of data centres, allowing wide-scale colocation, hosting, IaaS and managed services. This will ensure continued confidence and growth in the region.

Construction market conditions and publicly known projects

In what is a relatively small and new data centre market, the data centre construction market condition was considered warm for 2018.

Sonda announced plans to build a Tier IV data centre, a highly resilient facility aimed at banks, financial institutions and/or utility companies. It is not clear whether this facility will be available by the end of 2019.

Google continues its commitment to the region by investing in a solar farm to support its expanding data centre operations. It has recently announced that it is spending US$150m on its existing data centre built in 2015.

2019 outlook

With speculation mounting in regard to the arrival of other hyperscale providers in Santiago, it will not take much for the warm market conditions to overheat.

 

 


This content is part of the Data centre cost index 2018

Go to the main Data centre cost index 2018 page