Why Ascenty is thriving and upping its ante in the financial sector

With cloud now a reality for most financial institutions, datacenter providers are taking advantage of the opportunities while eyeing different ways of serving the market.

This is certainly the case of Ascenty, for which the financial sector is the third fastest-growing area, according to chief operating officer Marcos Siqueira. 

The firm is already the biggest datacenter company in Latin America in terms of sites, with 34 now in operation, under development or being constructed, and it continues to increase its landbank and total capacity, via expansions of its existing datacenters and new sites. 

Siqueira spoke to BNamericas during the Febraban Tech event in São Paulo, Brazil, which was the first time had Ascenty participated in Latin America’s largest financial services technology congress.

BNamericas: Why are you at Febraban Tech? How important is the banking industry for Ascenty?

Siqueira: It’s our third fastest-growing sector. Our largest sector in terms of customers is technology, the second is connectivity and the third is the financial industry.

Each year we have growth of approximately 50% in the financial sector, both in terms of revenue and customers. We serve everyone from the major banks to fintechs.

One of the things that proves our capacity in this sector is our portfolio of certifications, from ESG to PCI [payment card industry] compliance, to information security.

BNamericas: What are these companies looking for, specifically? Colocation, connectivity?

Siqueira: They're looking for their own colocation and connection with big cloud providers. They consider all that, plus our connectivity, the 5,000km of proprietary fiber we have, through which I reach all cloud providers.

What they need is connectivity, reaching the datacenter and reaching our Cloud Connect service.

BNamericas: How has this shift grown?

Siqueira: Because of fintechs. They needed to connect quickly with the big cloud providers. In addition, there's the issue of the PIX, which accelerated this movement in the sector and in the banks, because the PIX can't run in one place. It has to be distributed in terms of architecture. 

BNamericas: Seaborn, for example, offers connectivity between the financial hubs of São Paulo and New York ...

Siqueira: Seaborn is a partner. It has a PoP in our datacenters.

My network in this respect is focused on Brazil. I have a network coming out of the cable landing stations [CLS] in São Paulo, Rio and Fortaleza. This goes into the country to the datacenters. From the CLS, I partner with Seaborn, with all these low-latency submarine cable companies.

This whole ecosystem favored us. Customers have seen that it's not interesting to just be in the cloud, but also to migrate some of their solutions to physical environments in datacenters with low latency.

BNamericas: Are you working with all Brazilian banks?

Siqueira: With at least four of the five biggest. No public ones. We don't work with the government, you know, it's been our policy since forever. I would dare say that the major players in the financial market are with us, either for connectivity or datacenter.

BNamericas: And fintechs?

Siqueira: Considering fintechs we have approximately 50 companies in Brazil.

In Chile and Mexico we still haven't been able to enter this financial market. We still don't have big financial institutions in those countries.

It is somewhat connected with the issue of maturity in these markets. Besides, there aren't many datacenters with the level of certification that we're offering in those countries either.

BNamericas: You have other competitors with lots of certifications, including for the financial sector.

Siqueira: But, we don't have any competitor with the same level of certification that we offer. This I say with a lot of propriety, because we're always mapping how our competitors are certified. We're one of the companies with the most certifications in Latin America. 

And we've built a network that's mostly underground. We can deliver sometimes three or four different underground routes. We're delivering resilience. In our ecosystem, that's a great competitive advantage. When I compare it with our three big competitors in Brazil, none of them have such a network.

BNamericas: Have you finished connecting datacenters with the landing stations?

Siqueira: All cable landing stations are connected. And we have a point of presence for our network in all the datacenters in the market. Our competitors are also our suppliers, because we want to give our customers options. We can deliver at least two interconnection points to all major cloud providers.

Let's imagine that a customer needs to connect with Microsoft – nothing to do with Ascenty. We can say the following: 'Microsoft, where do you have a point of presence for connectivity, not computing, but for connectivity?' 'Oh, I have these places.' With our network we can deliver this to the customer, in different locations.

Our competitors don't do that. So if that same customer comes to our competitor and says 'I want Cloud Connect', that competitor will say: 'Okay, it's in my datacenter X.' But if that customer wants redundancy, they will have to hire connectivity from someone to get to some other datacenter.

We do this with all players: AWS, Google, IBM, etc. It doesn't matter if they are in our datacenter or in a third-party site.

BNamericas: Is the fiber network being expanded?

Siqueira: Where are we expanding today? Basically, where we identify that I have an overhead, aerial network and there's an opportunity to migrate to an underground network.

We're investing approximately 83mn reais [US$17mn] this year in connectivity alone – either in burying the network or in expanding the network in São Paulo.

BNamericas: How much of your network is still aerial?

Siqueira: About 30-40% – mainly places where I can't make an underground connection because the licensing time with the city hall can take a year and a half for me to get approvals, etc.

But we have plans to have a 100% underground network and our backbone is already 100% underground. I'm prepared for 5G, which will demand more data, more fiber, more datacenters.

BNamericas: Are you indirectly getting a small slice of the neutral fiber market?

Siqueira: Yes. It's not the goal, but we already have several ISPs that use our fiber and that use our datacenters.

BNamericas: So let's talk about the datacenters. You've just bought new land in Osasco.

Siqueira: It's actually in São Paulo. We miscommunicated that. But yes, we're expanding. We recently opened São Paulo 4, this one in Osasco. I still have two other datacenters under construction on this campus in Osasco. Today it has four datacenters and it will have another two in operation over the next two years.

Our official number is still 34 datacenters. Of these, 24 are in operation and 10 are under construction. Of the 24 in operation, 20 are in Brazil, two in Chile and two in Mexico.

And we bought more land in São Paulo. Why? Thinking about the growth that the city, not the interior of São Paulo state will continue to demand in the coming years.

We don't yet have a project under negotiation for this specific piece of land, but it's part of our strategy of having a landbank. It will be another campus we'll develop soon. We have land now in the city of São Paulo, in the interior of São Paulo state, in Mexico, Colombia and Chile.

BNamericas: How many datacenters will this new land in São Paulo host?

Siqueira: We're defining that. Our engineering team is working on how many datacenters versus how many megawatts we're going to offer. We're studying whether we can build one or two big datacenters or if we will have smaller datacenters with different capacities.

BNamericas: Construction would only take place in 2024 or 2025 then?

Siqueira: In the second half of 2024.

BNamericas: Do you already have contracted energy, even without defining how big the projects will be?

Siqueira: We already have approval from Enel. We considered the biggest scenario possible. Let's assume I'm going to build 100MW of energy. They will deliver that.

BNamericas: Ascenty doesn't have long-term contracts with power suppliers, like other competitors, right?

Siqueira: No, but our guarantee of delivery is documented. We do it by project. I can't speak about competitors, but we always announce something when it's concrete.

BNamericas: How is the entry project in Colombia going?

Siqueira: It comes out at the end of 2024. In Colombia we didn't buy land, we bought buildings so that market entry time was faster. We're now getting into the retrofitting of the first building. This process is relatively quick. The problem is the delivery time for equipment.

BNamericas: Is the capacity in the project already sold?

Siqueira: Not 100%. But we have projects sold for which we'll deliver part this year, part in 2024, 2025, 2026 ... It depends on customer demand. Sometimes delivering an entire project in Colombia in 12 months may not be advantageous. We need to be smart from the point of view of using capital at a time when capital is more expensive, and considering the size of that market.

Is the Colombian market currently extremely competitive? That's not what it seems, according to our evaluation, our experience, unlike the Mexican market.

In Mexico we built two datacenters and bought land for new ones. At the beginning of the year, we sold a third datacenter [the capacity] and we hadn't even finished selling the first two.

If we see that the market in Colombia is as competitive as this, we're also in a position to accelerate. We have investment and capital for that.

Peru, Panama, any other country in South or Central America – if we decide to invest in these new markets, it's because we've been studying that for many years and we understand that the time is right for that investment.

Possible countries are mapped out, as well as land or buildings, but for the moment we understand that it's not yet the time, we don't see the need.

BNamericas: How much capacity do you have?

Siqueira: Considering the 34 sites and not counting the new projects, the expansions I mentioned, we have 533MW of energy capacity.