Demand for colocation data centre facilities in the Latin American region looks likely to outstrip supply according to new research released by DCD Intelligence.
The report, Latin American Colocation, concludes that there is room in the market for new entrants, especially in cities outside of the major hubs. It says that most of the countries in Latin America are classed as emerging markets in terms of data centre 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 centre requirements. In fact, it adds, a larger percentage of data centre white space is outsourced in the LatAm region than in many western countries.
“What we see in the Latin American markets is that companies are far less reluctant to outsource data centre requirements than has been the case at same stage of market development in other regions,” says Nicola Hayes, managing director at DCD Intelligence and author of the report. “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,” she continues. “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.”
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 report finds.
“There are indications that some of the larger country providers are looking to establish a presence in neighbouring countries in order to capitalise on opportunities outside of their own markets but at present ‘regional’ coverage is the domain of the large international players,” Hayes concludes.