Global investments and robust construction pipeline drive data center market in Chile
- - September 3, 2023 September 3, 2023
- - By Online World Editor
Chile has positioned itself as a giant in data center activity in Latin America, driven by the significant investments of cloud computing providers that have landed in the country. The year 2022 witnessed a significant transformation in the local data center industry, with
wholesale providers establishing a wave of new centers, at the same time as some telecommunications companies exited the sector.
451 Research, a renowned market analysis and technology consulting firm, published its Technology & Business Insight (TBI) 2023 report on the leased data center market in Chile.
"It is expected that between 2022 and 2027 there will be significant growth in the supply of leased data centers in Chile, with a compound annual growth rate (CAGR) of 30% in operating space"
The Global Interconnection Index (GXI) 2023, published by Equinix, already anticipated that interconnection bandwidth would increase at a CAGR rate of 39% until 2025, with the Latin American region as the most important driver of this growth.
An outstanding example of this transformation in the Chilean market is the case of Entel, which sold its facilities to Equinix Inc, where, instead of reducing competition, these exits have increased it with the arrival of new suppliers present in multiple Latin American countries and other regions.
Despite the macroeconomic complexity due to inflation and interest rates, optimism about the Chilean market remains strong.
The departure in early 2023 of the large telecommunications conglomerates that dominated the Chilean market has given way to new companies specializing in colocation, which have become the main data center providers in the country. These providers are introducing more demanding operating standards, which translates into improvements in the redundancy and resilience of the facilities.
Leading cloud computing providers have announced the opening of cloud computing regions in Chile, including Amazon Web Services (AWS), Google Cloud, Microsoft Azure and Oracle Cloud. The positive attitude of these providers towards the market is expected to continue to grow, especially with the arrival of the Humboldt cable system, which will provide connectivity to the Asia-Pacific region.
"Perhaps most importantly, Chile is a landing point for eight major submarine cables, five of them in Valparaiso, 120 km from Santiago. The submarine cables enable high-speed connections between Chile and companies in North and South America.
Plans for new cables, such as the Humboldt cable system, will connect Valparaiso to Australia and beyond, making Chile a convenient starting point for companies looking to routinely and quickly connect with businesses in the Asia Pacific region."
According to the same GXI 2023 Index, an increasing number of companies are turning to digital technology to stay ahead of the curve, reaching 30% globally, despite supply chain constraints, geopolitical and economic instability. Retail suppliers continue to enjoy a large local customer base, although international companies generate higher revenues.
Financial services companies also remain the main customers of retail colocation providers in Chile. Sectors such as e-commerce, gaming, streaming and information technology continue to experience steady growth, driving the increasing need for robust data center infrastructures.
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Source: Mundoenlinea.cl
