The Growth of Cloud Providers in the Region Drives the Momentum for Colocation Services
The Latin American data center services market is growing; companies are beginning to understand the benefits of outsourcing infrastructure to a third party and are starting to lose their fear and mistrust of service providers.
There are still considerable opportunities in the Latin American market, with providers expanding facilities and building new ones and private equity firms investing in data center companies.
The colocation segment has grown significantly due to the growth of cloud providers (and related managed service providers [MSPs]) and partial or complete data center (DC) outsourcing by enterprises and telecom operators.
Many companies are realizing that owning real estate and operating data centers is not worth the cost and effort and should be left to global DC companies that have the required scale of operation and can drive more efficiencies in data center operations.
As companies become more educated about using third-party data center services, there is a better understanding and appreciation of the benefits of leveraging specialist service providers to facilitate their IT operations and mitigate risks.
As more data gets generated, companies need to analyze and derive business insight. With a variety of information generated by connected devices and sensors, an engine that can mine large datasets and extract relevant information will drive the adoption of IoT, analytics, and artificial intelligence/machine learning. A DC closer to the data is required to house such an engine.
The IT industry faces a shortage of workers, making security expertise a valuable and rare asset. For many organizations, these resources may be too costly and difficult to attract and retain. The lack of available security talent restricts the ability of enterprises to proceed with in-house adoption of more complex technologies.
DC colocation service providers have the opportunity to develop edge data centers (i.e., micro or modular) to host hardware from cloud providers that develop edge zones and telecom service providers. With the deployment of 5G, there will be a significant increase in demand for multi-access edge computing infrastructure and platforms.
Computing and data processing are likely to move to the edge of the network to support the applications utilized by end users and enterprises. However, DC outsourcing service providers must be aware that most of the data storage will continue to be in large and centralized data centers.
DC colocation service providers must engage with the major cloud providers to understand the roadmap of expansion and be able to support the demand, in addition to pursuing business with new potential cloud providers entering the Latin American market.
