datacenterHawk

The Latin America data center market is a vibrant and evolving space with its own unique opportunities and challenges.

In this video, we explore insights shared by Steve Sasse, Datacenter Hawk's regional director for Latin America, on the region's data center landscape. With extensive experience in the telecom industry and deep knowledge of the Latin American market, Steve offers valuable perspectives on navigating this fast-growing region.

Understanding the Latin American Market

Companies must adapt to various laws and regulations across different countries in Latin America. One critical factor to consider is the inflation rate, which varies across the region. Providers often incorporate price increases into their contracts to mitigate the impact of inflation. Additionally, currency devaluation is common, requiring careful consideration of contract currency to protect against potential losses.

Unique Connectivity Challenges

Latin America faces connectivity challenges due to limited intra-regional connectivity. While markets like Brazil and Chile have established hyperscale cloud nodes, the lack of interconnection between countries within the region hampers low-latency connectivity. To address this, hyperscale providers are now focusing on establishing localized or regional cloud nodes to improve connectivity and reduce latency.

Primary Markets and Data Center Density

Data center density is concentrated in primary markets, usually the capital cities or largest metropolitan areas. Secondary markets are limited, with some existing primarily due to submarine cable capacity and landings. Despite the presence of secondary markets, data center activity remains concentrated in the largest metropolitan areas.

Addressing Underdeveloped Digital Infrastructure

Compared to the United States and the United Kingdom, Latin America has underdeveloped digital infrastructure, highlighting the potential for growth and investment in the region's data center market. This emphasizes the need for extensive infrastructure development to improve connectivity and reduce latency.

The Rising Data Center Hub: Mexico

Mexico is emerging as a thriving market in Latin America, witnessing impressive data center construction and expansion. The city of Querétaro is gaining attention as a burgeoning data center hub, with growing data center ecosystem. Notably, Mexico's fiber connectivity is primarily terrestrial, unlike other Latin American countries, which rely on submarine cables.

Conclusion

Latin America's data center market presents unique opportunities and challenges. As the region continues to develop its digital infrastructure, companies must adapt to diverse laws, regulations, and market conditions. Addressing connectivity challenges and establishing localized cloud nodes are crucial for efficient data transmission within Latin America. With Mexico emerging as a significant player in the market, the region is poised for further expansion, making it an exciting space for data center investment and innovation.

With the rise in demand, data center pricing has become a topic of focus for many organizations

Factors Affecting Data Center Pricing

The pricing of data centers is determined by several factors, including location, scalability, security, reliability, and latency. Location plays a significant role in pricing, with some areas commanding a premium due to their proximity to high-demand markets or access to renewable energy sources. Scalability is another vital factor, as organizations need to be able to scale their capacity quickly and without service interruptions. Security, reliability, and latency are also essential considerations, as downtime and data breaches can have significant financial and reputational consequences.

Impact of Market Dynamics

Data center pricing is also influenced by market dynamics, such as supply and demand, technological advancement, and regulatory changes. The rapid pace of technological advancement means that data center operators need to invest in new infrastructure continually. This infrastructure must also comply with regulations governing data privacy and security, which can add to the overall cost of operations. These factors, coupled with the current demand-supply imbalance, mean that pricing is likely to continue to rise for the next few years.

Conclusion

The data center industry is in the midst of unprecedented change, with new market dynamics, technological advancements, and regulatory requirements shaping the pricing landscape. Organizations must carefully consider their data center needs, evaluate the factors that influence pricing, and build strong relationships with data center operators to negotiate favorable terms. The road ahead is uncertain, but businesses that take a proactive approach to data center pricing will be better equipped to navigate this period of change.

The Dallas market has become a major hub for data centers in recent years. This is due to its strong telecom infrastructure, reliable power supply and plenty of space that makes it an ideal place to build large-scale data center facilities. The city of Dallas has embraced this development, with a number of new purpose-built data centers popping up in the area.

The APAC data center region is on a path of growth.

The data center industry is a complex and constantly evolving field that requires specialized knowledge and skills, especially in the APAC region. As the data center demand continues to grow, so too has the need for investment in site acquisition, site preparation, hardware, and software. This increased capital cost is particularly evident in second-tier markets or those areas not previously utilized for data center development all over the world and especially in the APAC region.

The next 3 to 5 years will see continued growth and evolution in the data center industry as new technologies, such as AI and machine learning are integrated, and new markets develop. This period of rapid change presents a great opportunity for those willing to stay informed and adaptive to the changing landscape.

The data center industry will continue to provide those passionate about their craft with endless opportunities to grow, innovate, and make an impact on the world around them. With continued investment in research and development, advocacy for sustainability initiatives, international collaborations, and education, the field can only continue to expand and diversify. For those willing to stay informed and embrace change, the future of data centers looks bright.

In this podcast, we explore some of the key predictions for the data center industry in 2023, including difficulty in delivery, pull back from larger users, lease price increases, international expansion, and secondary market growth. By understanding these trends, data center operators and businesses can better prepare for the future and take advantage of new opportunities.

0:00 - Intro 

0:55 - 2022 predictions review  

6:19 - 2023 predictions overview 

7:14 - Difficulty in Delivery 

9:27 - Pull Back from Larger Users 

12:06 - Price Increases on Retail, Wholesale, and Hyperscale 

14:55 - Companies Expanding Internationally 

19:22 - Secondary vs Primary Market Growth  

23:15 - Closing Thoughts from David

Overall, 2023 is shaping up to be an exciting year for the data center industry. And now more than ever, it is crucial for data center operators and businesses to stay up-to-date on these trends and developments in order to remain competitive and take advantage of new opportunities. By doing so, they can ensure success and continue to drive the industry forward. Check out our Insight tool to get deep analysis and trends updated each quarter on global data center markets.

We recently sat down with Andy Stewart from Evoque Data Centers to discuss the challenges and progress of technology companies when it comes to infrastructure planning. We discussed how many tech companies nowadays require large amounts of power and why they need a partner who not only provides solutions for large-scale projects but also offers long-term planning and budgeting solutions. This is what Evoque calls “spend agility”.

We also discussed the importance of sustainability, with renewable power being a major trend in data centers today. Andy believes that companies are looking for ways to reduce their carbon footprints and increase energy efficiency. He also noted that data center campuses are growing larger and more complex, meaning they need to be designed with sustainability in mind.

Andy predicts that companies will continue to invest heavily in renewable solutions for their data centers over the next few years. With this trend becoming more popular among tech companies, Andy believes that the industry will continue to move towards a more sustainable future. 

A big thanks to Andy for joining us and sharing his insights! It was great to complete the trilogy from a discussion perspective and we look forward to the next one.

As data centers have continued to shift and grow, the data center industry has had to adapt. Along with this growth, new opportunities and challenges have arisen for businesses in the space. In order to stay ahead of the curve, it's important for companies to be aware of these changes and how they can impact their business. In this video discussion with Randy Rowland, COO of Cyxtera, we discussed some of the latest changes in the data center industry and how businesses like Cyxtera have been able to adapt and change with them.

#1 Data Centers are Shifting East

For a long time, North America has been home to the majority of data centers. However, that is starting to change. As data centers continue to migrate eastward, Asia is quickly becoming a major player in the space. This shift is largely being driven by two factors: first, rising demand from Asian companies and governments; and second, falling costs in Asia relative to other regions.

As a result of this migration, businesses need to start paying attention to new markets like China and India if they want to remain competitive in the data center space. 

#2 The Rise of Edge Computing 

Another trend that is impacting the data center industry is edge computing. Edge computing refers to the practice of moving processing power closer to where it is needed most. This is often done to improve performance or reduce latency.

As the internet of things (IoT) continues to grow, the demand for edge computing is expected to increase. This is because devices that are part of the IoT often need to communicate with data centers in real-time. By moving processing power closer to these devices, businesses can ensure that data is processed quickly and efficiently.

#3 Data Centers are Getting Greener 

As awareness of the environmental impact of data centers has grown, so too has the pressure on businesses to operate in a more sustainable way. As a result, many data centers are now adopting green practices, such as using renewable energy, recycling waste heat, and using more efficient cooling systems.

Adopting these practices not only helps to reduce the environmental impact of data centers, but can also lead to cost savings. As energy costs continue to rise, businesses that have adopted green practices will be better positioned to remain profitable.

#4 The Cloud is Here to Stay 

The cloud has caused some big changes in the data center industry, and its impact is only expected to grow in the years to come.

The cloud offers a number of advantages over traditional data center models, including increased flexibility, scalability, and cost-efficiency. As a result, more and more businesses are moving to the cloud. 

The cloud is also having a major impact on the way data centers are designed and operated. As more businesses move to the cloud, data centers are becoming more standardized and simplified. This trend is expected to continue as the cloud becomes an increasingly integral part of the data center industry.

Looking to the future, it's clear that the data center industry is undergoing a period of major change. Businesses that are able to adapt and take advantage of these changes will be well-positioned for success.

The data center industry is in the midst of some major changes. Here are five of the biggest shifts that you need to know about.

Timing:

The data center industry is facing a shift in timing, as developers are doing what they can to try to keep up with the demand. Providers have a goal to sign leases which is leading to a land rush dynamic, as companies are attempting to lock in space sooner rather than later. This rush is being driven by the need for reliable and consistent power, as well as the rise of cloud services. One example of this can be seen in Northern Virginia. This is a historically reliable market, but with recent power delivery challenges, providers are looking to submarkets around Ashburn and even other major market markets for opportunity.

Pricing:

The industry is also seeing a shift in pricing as providers are raising rates and customers are becoming more selective. This shift is being driven by the increasing costs of operating data centers, which is being passed on to customers. In some markets, prices are increasing by as much as 20%. Due to this high demand, data center lease rates are coming at a premium rate.

Types of development:

One of the major types of development changes occurring in the data center industry is an increase in build-to-suit (BTS) projects. In the past, most data center developments were either owner-occupied or speculative builds that were subsequently leased out. However, BTS projects are becoming more common as companies look for turnkey solutions that meet their specific needs. This shift is being driven by the increasing complexity of data center operations, which has made it more difficult for companies to find space that meets their requirements.

International Focus:

Another change in the data center industry is a shift in focus from domestic to international markets. In the past, most data center development was concentrated in North America. However, this is changing as companies look to expand their operations into new markets. This shift is being driven by the increasing global nature of business, which has made it necessary for companies to have a presence in multiple countries.

Site Selection:

The data center industry is also seeing a change in site selection criteria. In the past, most data center development was concentrated in urban areas. However, this is changing as companies look to lower their costs by locating data centers in cheaper, less-developed areas. This shift is being driven by the increasing costs of operating data centers in urban areas, which has made it more expensive for companies to locate their facilities there.

These are five major shifts that are occurring in the data center industry. Each of these changes are driven by a different factor, but they all have one thing in common: they are all making it necessary for companies to adapt their operations to meet the changing demands of the market. As the data center industry continues to evolve, these shifts will continue to shape the way that companies do business.

The North American data center industry is expected to experience significant growth in the next few years. There are several factors driving this growth, including the rise of big data and cloud computing, and the increasing demand for colocation services. In this blog post, we will take a closer look at the North American data center market and explore some of the key drivers behind its growth.

Get a 15 minute demo of our platform:

https://lp.datacenterhawk.com/request-a-demo?utm_source=youtube&utm_medium=youtube&utm_campaign=demo

–––––

In this episode of our series “Big Topics”, we are discussing data center investing with Josh Pang, Head of Digital Infrastructure for Carlyle Infrastructure Group. Carlyle is a global investment firm with over $300B of assets under management and Josh has over 15 years experience in infrastructure investment.  In this conversation, we cover several unique variables in data center investment.

Current Data Center Investing Environment

Valuations multiples remain high across the data center sector. The pace has accelerated as investors gain confidence in the long term trend supporting data center growth and demand. With record high valuations, investors are utilizing a buy-and-build” strategy for speed to market. Secondary EU and APAC markets are garnering more demand as well. Edge Computing is starting to show profitable and sustainable use cases due to densification of networks, lower latency deployments, and proliferation of fiber capacity.

Sustainability and Power Constraints

Demand for green data centers is growing. Environmental, Social, and Governance (ESG) is becoming a focus across the industry. Carlyle prioritizes their focus on green energy and has partnered Birch Infrastructure for green data center solutions. Many approaches are being utilized to manage power more effectively to reduce consumption in light of emerging constraints. Increased demand is expected in spite of various challenges in the industry. 

Please share and like this video if you found this information helpful and be sure to stay tuned for our next episode!