By Narayan Ammachchi
The Data center services market in Latin America is experiencing a classic ‘perfect storm’, where a combinations of internal market forces and global demand are accelerating the need for higher-end server space.
In its 2013 forecast, Research firm IDC predicted that LATAM’s data center services market would be worth about $3 billion this year.
Barely days after its prediction, KIO Networks announced that it would invest US$120-130 million on new data centers in Guatemala and Colombia. The Mexican IT firm, which opened a data center in Panama last year, is gearing up to offer data center services to several other countries in the region including Ecuador, Peru and Chile.
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The region’s data center market attracted global attention last year when the search engine giant Google started building a huge data center in Chile. Google’s facility is likely to be up and running sometime this year.
Many other big name U.S. firms are jumping in. The first to open the flood gates was U.S. telecom firm Verizon, which bought Terremark for US$1.4 billion specifically for a share in the region’s data center services market.
Not long after that, Equinix purchased colocation firm Alog DataCenters do Brasil. Global Crossing has also moved into the market, acquiring data center provider Level 3. While Logica is set to expand its data center in Sao Paulo, Brazil, UK-based telecom giant BT is setting up a data center in Bogota.
As of today, Florida remains the primary location for many Latin America-focused data center operations – but that is undoubtedly going to shift significantly in the coming years. Uptime Institute, the global data center authority, says Latin American currently accounts for a mere 6 percent of data centers it certified globally.