Latin American colocation market soars

DCD Intelligence's report indicates the Latin American colocation data center market is ripe for new entrants with most of the Latin American countries classified as emerging markets.


DCD Intelligence reports that demand for colocation data center facilities in the Latin American region looks likely to outstrip supply.

The new report, "Latin American Colocation" concludes that there is room in the market for new entrants, especially in cities outside of the major hubs.

Most of the countries in Latin America are classed as emerging markets in terms of data center market growth and in common with other emerging markets such as those in Asia Pacific, Colocation is now seen as a viable option for businesses in terms of outsourcing their data center requirements. In fact, a larger percentage of data center white space is outsourced in the Latin American region than in many western countries.

New Colocation Space Latin American Markets. Courtesy: DCD Intelligence

According to Nicola Hayes, managing director at DCD Intelligence "What we see in the Latin American markets is that companies are far less reluctance to outsource data center requirements than has been the case at same stage of market development in other regions. In previous years the colocation market was hampered in Latin America by a lack of suitable pure colocation space, but this has changed over the past 2 years with a greater variety of stock now available.

“2012 saw a significant amount of new build plus expansion to existing facilities in many of the countries researched and – whilst Brazil continues to offer the largest amount of colocation space and has the largest number of providers across the region – other countries are gaining momentum. For example Colombia witnessed the highest number of new entrants to the market and Chile’s growth rate in terms of available space has overtaken that of Mexico,” Hayes said.

Although supply is increasing, there is still room for new entrants – particularly as demand is rising not only in the major cities where the majority of space is located but also in secondary locations.

The Latin American Colocation report also identified that providers with a regional rather than single country presence are for the most part international providers rather than native Latin American companies.

“There are indications that some of the larger country providers are looking to establish a presence in neighboring countries in order to capitalize on opportunities outside of their own markets but at present ‘regional’ coverage is the domain of the large international players,” Hayes said.

Click here for the full report.

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