Report: Colo data center space is hard to come by in Latin America

DCD Intelligence says eventually demand is likely to outstrip supply, as Latin American companies are less reluctant than others to outsource.

DCD Intelligence’s report “Latin American Colocation” says that demand for colocation facilities in the Latin American region looks likely to outstrip supply, although no specific timetable for that crossover point was mentioned in the research firm’s announcement of the report’s availability.

The company explained: “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 LatAm region than in many western countries.”

DCD Intelligence’s managing director Nicola Hayes added, “What we see in the Latin American markets is that companies are far less reluctant to outsource data center requirements than has been the case at the 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 two years with a greater variety of stock now available.”

She added that in many of the countries covered in the report, a significant amount of new-build and expansion projects took place in 2012. “While 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,” Hayes said. “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.”

While the supply is increasing, demand also is doing so with at least as much fervor. “There is still room for new entrants,” DCD Intelligence said, “particularly as demand is rising not only in the major cities where the majority of space is located, but also in secondary locations.”

One noteworthy business dynamic coming out of the report is that few Latin American-based providers have crossed borders to serve more than one country. Hayes noted, “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.”

You can find more information on the report here, at DCD Intelligence’s website.

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