LatAm datacenters are booming – but some countries are off the radar

Latin American datacenter build-outs are booming due to content and connectivity demand and driven by cloud providers looking at established regions and availability zones around major population hubs.

Brazil has for many years been the leader in datacenter projects, but deployment has been growing also in Chile and to a lesser extent in Colombia, and more recently in Mexico.

The industry has opportunities anywhere with high consumer demand. But population factors and cloud computing needs are not the only elements at play, and some countries are off the datacenter radar for different reasons.

“Countries like Venezuela, Bolivia, Paraguay are out of the equation. They are difficult countries to operate in, with a lot of challenges in terms of politics, regulation and corruption,” said Jeremy Villalobos, COO of GoldConnect, at a Capacity LatAm panel.

Before deploying datacenters, investors are not only evaluating population, location and demand but also policies, investment-friendly regulations, and sustainable and cheap energy provision.

All these factors helped put Chile on the map while the country also offers an important exit to the Pacific and access to international connectivity systems, such as Google’s US-Chile Curie cable.

“Chile is becoming a very important hub. I see Chile as a very strong market besides Brazil, Mexico, Colombia. A lot of cloud providers are looking at Chile as a strategic point in Latin America,” added Villalobos.

GoldConnect has also carried out projects in the Dominican Republic.

Also read: Hyperscale datacenter projects set to spread their wings in LatAm

For other, smaller nations with stable regulation and reasonable demand, modular datacenters are a possibility to bring virtual cloud servers to the local market. 

GoldConnect has worked in the past with such modular sites, which don’t involve physical buildings and are moved around. 

“There are many different options to address specific markets [in the region]. Modular datacenters are one of those. You can find a modular datacenter Tier 3 or 4 certified, which basically gives all the turnkey resources for any company looking to address the local market,” said the executive.

Big and small projects are coming along in the region.

“We are seeing Latin America as a huge growth region for us, from our existing customer base in North America. Our first location in Latin America is in São Paulo, north of Campinas, where we are developing 58MW capacity buildings. For us, chasing the cloud is where we see growth coming from in the region,” said Alex Tilley, vice president for the EMEA and Latin America regions of San Francisco-based CloudHQ, focused on hyperscale datacenters.

CloudHQ is also building a datacenter in Querétaro, Mexico.

These will be CloudHQ’s first datacenter projects in Latin America. 

The company has sites in the US and is developing facilities in Germany, London and the US (two, in Virginia).

Also Read: Project Spotlight: LatAm datacenter build-outs

Tilley said fiber connectivity infrastructure involving metro and cross-continental networks is essential for datacenter projects, especially large-scale ones.

“It’s more difficult to establish [in some cities] if you don’t have fundamental infrastructure supporting the metro networks and the interconnection between the datacenters," he said, adding that in both São Paulo and Querétaro the company is completing infrastructure by “digging its own fiber ducts.”

Adam Janota, US firm Equinix's senior business development director, also said terrestrial fiber is key to edge computing (datacenters close to the end-user), a trend he sees as getting more important because demand for better user experience and content access will rise.

“Historically, you’d have a lot of digital demand in those markets, but the connectivity perhaps wasn’t as good. There’s an evolving infrastructure growth across the region that is driving [the market],” said Janota.

Equinix has multiple datacenters in São Paulo and Rio de Janeiro, and in Bogotá. Recently, the company entered the Mexican market with Axtel’s acquisition. 

Equinix has also supported IPTP's 300km terrestrial cable between Peru, Bolivia and Brazil, connecting Lima to Equinix's São Paulo datacenters.

The strong activity of international submarine cable projects on both the Atlantic and Pacific coasts, to which Equinix is providing landing stations and collaboration with service providers, is seen as another driver for datacenter build-outs, according to Janota.

"The demand is driving new infrastructure, the new infrastructure is driving the usage."