Sonda's data-driven future: Boosting cloud power and AI capabilities

Chilean IT multinational Sonda is investing 16mn reais (US$2.9mn) in hardware and 1.5mn reais in its workforce as part of a project to modernize and expand the capacity of its tier 3 datacenter in Belo Horizonte in Brazil's Minas Gerais state.

The investment includes the acquisition of five storage solutions from IBM, the provider chosen by the Chilean group following a broad market selection process.

In this interview, Ricardo Scheffer, CEO of Sonda Brasil, sheds light on the initiative, talks about multi-cloud and new datacenter works, and gives an update on a signature PPP fiber project.

BNamericas: What is the strategy behind the investment in the datacenter?

Scheffer: As you know, we have this datacenter in Belo Horizonte which is the result of the acquisition of Ativas in 2016. And our goal is to always seek technologies that are in line with the current market needs.

So, when you look at storage, data allocation, there are issues of transfer speed, specific technology and themes that start to fit a little more into the market consumption profile. Some models start to depend a little on some specific technologies.

Seeking to deliver a better experience that is more adapted to the business needs of our customers, we evaluated some solutions and decided to work with the IBM platform. And, as a result of this decision, we made an investment of around 18mn reais for the datacenter in Brazil.

BNamericas: Is IBM's selection by the Sonda group limited to this particular datacenter? 

Scheffer: At this point, we're focusing on our datacenter here in Brazil, but this can certainly be used in other datacenters later.

BNamericas: Are you making other investments in the site besides storage?

Scheffer: Yes. The investments involve making the datacenter increasingly more compliant with the new needs that are emerging in the market, including artificial intelligence, which is something that consumes a lot of processing capacity.

The multi-cloud aspect is also a very big focus for us. When you talk about hybrid cloud, there is a scenario where you can have part of the client's data on premise, part of the data in a private cloud, for example, and another part in a public cloud.

You need to have the right tools to manage and make use of this multi-cloud environment, to allow the ecosystem to function properly.

To do this, you need to have a datacenter with the appropriate technologies, otherwise you won't be able to provide this type of service to customers.

BNamericas: Is the current investment a direct result of customer demand, or are you anticipating customer demand?

Scheffer: Both. We have a very robust customer base at Sonda, with active customers. By knowing the environment of these customers in a little more depth, understanding a little about what will be needed for the future of these customers' environments, we can anticipate certain things.

BNamericas: How is the occupancy rate at the Belo Horizonte site?

Scheffer: We have a good number of customers in the datacenter, but we still have some space available.

I don't have full occupancy today, but our projection is that before long, we will have a datacenter with a fairly significant occupancy level.

BNamericas: The market usually refers to around 90% in occupancy being a trigger for expanding a site or building a new datacenter. Are you below that today, around 70%, would you say?

Scheffer: We're below that, around there. 

But there is an important point here, which is the construction time for a datacenter, even a modular one. Maybe we should reassess and perhaps review a little this 90% criterion, because the technology has evolved very quickly.

Today, the processing capacity with the theme of artificial intelligence anticipates an exponential growth in consumption.

Having a datacenter with 90% occupancy and from that moment having a trigger that would generate an action to begin an expansion may leave you with some timing challenges to put the product on the market within the demand that may arise.

BNamericas: Especially if you reach that point and there is no more room in the building, no more space.

Scheffer: Exactly.

BNamericas: So you're envisioning an expansion?

Scheffer: It depends on how the market is consuming, what the future consumption projections are. If the market indicates that datacenter consumption should remain the same and should accelerate, there will undoubtedly be new investments so that we have the necessary availability to serve our customers.

BNamericas: Is the occupancy level at Belo Horizonte in line with all the other Sonda datacenters?

Scheffer: I can't speak for the head office, but the datacenters in Chile have a very high occupancy rate.

The Chilean market is a very mature market for Sonda, given the company's representation in the country.

It's natural that the volume of services there, including for datacenters, I wouldn't say is greater, because Brazil is many times larger than Chile, but due to the market share that Sonda has in Chile they have a fairly significant occupation of datacenters there.

BNamericas: You said that you can't speak for the parent company. In any case, this investment in Belo Horizonte doesn't change with the search for investors that the group is doing for the datacenter business, right?

Scheffer: No, there is no change.

BNamericas: How is the fiber PPP in Mato Grosso do Sul advancing?

Scheffer: We're doing very well with the project. When you talk about projects with the public sector, there's series of challenges and complexities that are natural.

Contractually, we have to deliver the project in December 2024 and I can say that we will deliver it before that.

When we consider that this is a project that covers the entire state, with over 7,000km of fiber laid, which involves the construction of a datacenter, and the goal of providing high-speed communications throughout the territory, delivering this project ahead of schedule is something that really surprised me.

BNamericas: What remains to be delivered?

Scheffer: Less than 1,000km of fiber, I would say.

Sonda is traditional in terms of project delivery and quality of delivery. But this was a project with major challenges, related to documentation and environmental licenses. We laid fiber through the middle of Pantanal, through wetlands.

Being part of a project like this, and being able to deliver this project ahead of schedule, is fantastic.

BNamericas: Sonda was negotiating fiber PPP projects with other states. What happened?

Scheffer: When you talk about a PPP, there's a viability cycle that's longer than that of a traditional concession. The PPP in Mato Grosso do Sul took four years to materialize.

These are long-term projects, because there's a whole timing, a natural process of a PPP being worked by the states until, finally, a notice is launched and several companies compete.

BNamericas: Is this already happening? The competition phase?

Scheffer: No, not yet in competition. That should still take another year, a year and a bit.

BNamericas: Would there not be pressure on timing there? There are elections in 2026 and state administrations may change.

Scheffer: Exactly. That's why we expect to be able to move this forward by then.

BNamericas: The federal government included the Infovias Estaduais project, led by RNP, in the new PAC investment program. They're inking projects for fiber backbones with several states. Isn't this competition for Sonda?

Scheffer: No, I wouldn't call it competition.

BNamericas: Why not?

Scheffer: Because, in fact, when you talk about... I mean, it's not really a public-private partnership, right? And when you talk about a public-private partnership, I see advantages for the states that other models don't bring.

We can't forget that, when you have a PPP, which is the model we have with Mato Grosso do Sul, for example, there's a base network project outlined and there are the projected extra revenues, which are all the business that can be done on that infrastructure. 

The project is already designed in such a way that you can scale it and of all the volume generated with this extra revenue, 20% is transferred to the government.

Depending on the volume of these revenues, you can even eliminate the tariff paid for that entire network. 

The model you mentioned doesn't provide for that.

BNamericas: Right, but regardless of the benefits of a PPP, lots of states are closing partnerships with RNP.

Scheffer: To date, I haven't seen any model that is more advantageous to the state from the perspective of the possibility of effective cost reduction than a PPP.

In any case, we participate in processes formatted both as PPPs and as traditional public tenders.

And I can tell you that, without mentioning the state, we are participating in a competition that is already underway and quite advanced, in which the government has chosen not to be a PPP.