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Data Center Construction Market in Latin America - Industry Outlook and Forecast 2019-2024

(2019 Edition)

SKU : ARZ190802
  • Published on : September 2019

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This research report on the Latin America data center construction market covers market sizing & forecast, market share, industry trends, growth drivers, and vendor analysis. The market study includes insights on segmentation by general construction (building development, installation and commissioning services, building design, physical security, and DCIM), electrical infrastructure (UPS systems, generators, transfer switches and switchgears, rack PDUs, and others), mechanical infrastructure ((cooling systems: CRAC & CRAH units, chiller units, cooling towers, and dry coolers, economizers and evaporative coolers, and other units) racks and other infrastructure), tier standards (tier I &II, tier III, & tier IV), and geography (Brazil, Colombia, Chile, and Rest of Latin America).

Latin America Data Center Construction Market: Dynamics

The implementation of free cooling techniques is expected to save 30% energy consumption in the Latin America data center construction market

The Latin America data center construction market is witnessing significant investments from data center operators such as Ascenty (Digital Realty and Brookfield Infrastructure), Equinix, ODATA, Telefónica, Axtel, Telecarrier, and Entel. The adoption of cloud-based and managed services and colocation and cloud connectivity services is expected to be a major driver for Latin America data center market growth. The growing number of data centers in Latin America and the increase in awareness to reduce energy consumption have led to the higher adoption of DCIM solutions, which bring significant saving to data center OPEX. Hence, the growing implementation of DCIM solutions in data centers is likely to drive the market in Latin America. Further, the use of artificial intelligence and robot monitoring systems is also expected to contribute in the growth of Latin America data center construction market during the forecast period.

Many data centers in the region are currently built to support the rack density of 10 kW and above. This trend is expected to continue during the forecast period, with several modular data centers to be deployed in the continent with racks that can support the density of up to 10kW or above. Further, the use of the free cooling technique is witnessing momentum as many operators are using free cooling chillers, economizers, and evaporative coolers to reduce server heat. Also, the adoption of free cooling technique in countries such as Chile and Columbia can reduce energy consumption by 30%.

The availability of tax incentives in several Latin American countries for the data center development for both local and global investors is one of the major factors driving the Latin America data construction market during the forecast period. The Latin America data center construction market is projected to grow at a CAGR of around 7% during the forecast period.

Latin America Data Center Construction Market: Segmentation

This research report includes detailed market segmentation by infrastructure, general construction, mechanical infrastructure, tier standards, and geography.

 

Latin America Data Center Construction Market: Infrastructure

The adoption of modular and scalable UPS solutions is likely to be high due to their high-performance efficiency and reduced maintenance costs

The demand for generators in the Latin America data center market growth is expected to grow significantly due to the unreliability of power supply in several countries in Latin America. However, to reduce carbon emission, natural gas and bi-fuel generators are expected to gain traction in the market. The use of DRUPS systems is likely to gain prominence in the region, as they combine both battery and flywheel UPS topology with a diesel generator to provide backup during power outages. Further, the providers in Latin American countries continue to invest in N+4 or N+ 6 redundant generator capacities for power distribution and UPS systems.

UPS systems of 2N redundancy are likely to gain significant traction in the Latin America data center construction market due to the increasing Greenfield data center development (generally more than 10MW). The market will also witness the emergence of lithium-ion battery systems as they are more efficient and safer than VRLA batteries. Besides, integrated battery monitoring solutions along with infrastructure procurement at a low cost is expected to witness high demand in the market. Further, the adoption of modular and scalable UPS solutions is expected to be higher than traditional non-scalable devices due to greater efficiency and reduced maintenance costs. These factors are likely to drive the Latin America data center construction market during the forecast period.

Latin America Data Center Construction Market: General Construction

Designing a sustainable operational environment helps operators in achieving tax breaks from local governments

The growing number of greenfield and modular facilities projects is likely to continue in the market over the next few years. The modular construction will add significant revenue to the market during the forecast period.

The growth in Greenfield facilities will also help to generate revenue for general contractors and installation and commission service providers. In general, the data center design is carried out by engineering contractors, third-party consultants, and operators. Besides, the need for the skilled workforce with expertise in the construction and operation of facilities is likely to grow in the Latin America data center construction market.

Designing a sustainable operational environment helps operators in achieving tax breaks from local governments. Due to increased uptime and efficacy, the adoption of tier III standards comprising N+1 redundancy will gain propulsion, thus driving the Latin America data center construction market.

Latin America Data Center Construction Market: Mechanical Infrastructure

The installation of 45U, 47U, and 48U rack units is likely to  grow in data centers in Latin America

The growth of cooling system markets depends on the construction of data centers, type of adopted systems, redundancy, cost, and growth of rack power density. Data centers developed with less than 5 kW per rack include the use of comfort cooling solutions.

The growing construction of data centers in Latin America will increase the adoption of 45U, 47U, and 48U rack units. The market will also witness increased containment-based design with up to 20 racks. Further, piping units, pump systems, and valves used during the construction of facilities are major revenue generators for the other infrastructure segment. In addition, the use of free cooling systems using evaporative coolers and air/waterside economizers is expected to witness a growth along with other infrastructure during the forecast period.

Latin America Data Center Construction Market: Tier Standards

Over 85% of data centers  in Brazil, Colombia, Chile, Argentina, Mexico, and Peru are Tier III certified

Over 85% of certified data centers are Tier III types. Most facilities in Brazil, Colombia, Chile, Argentina, Mexico, and Peru are Tier III certified. However, several facilities are being constructed as colocation data centers. Most new facilities are designed as per Tier III standards with a minimum of N+1 redundancy; however, flexible design can help them to be reconfigured up to 2N+1 redundancy as and when the demand arises. The increased investment by hyperscale developers and the adoption of modular data centers of tier IV standards are expected to boost the Latin America data center construction market.

Latin America Data Center Construction Market: Geography

Colombia is widely gaining momentum in the Latin America data center construction market due to the availability of tax incentives for data centers development

The data center construction market in Brazil is expected to attract high investments from colocation providers during the forecast period. For instance, The national innovation and technology funding agency FINEP (Funding Authority for Studies and Projects) will allocate $670 million to Brazilian Smart Industry projects. Thus, the increased investment will boost the Latin America data center construction market.

Colombia is widely gaining momentum in the data center construction market due to the availability of infrastructure and tax incentives. Further, the increased number of mobile devices and access to the internet will likely to add a greater number of facilities during the forecast period. Besides, the presence of free trade zones and the availability of adequate construction infrastructure are attracting several construction contractors to develop facilities in the region, thereby aiding the Latin America data center construction market.

The growing demand for cloud-based services, internet of things (IoT) and big data analytics has significantly contributed to the growth of the data center market in Chile. Further, due to increasing submarine cable deployment, the data center market is growing rapidly in the country. Also, substantial investment from big cloud providers such as Google in Chile will bring new job opportunities in the country, thereby boosting the Latin America data center construction market.

Rest of the countries in Latin America includes Argentina, Ecuador, Peru, Venezuela, Uruguay, Nicaragua, Paraguay, Mexico, Bolivia, Honduras, and the Caribbean. The investment in improving the digital economy is expected to drive the market among the rest of the countries. Thus, the demand for data center services is expected to expand quickly among all other Latin American countries. These countries will witness an increase in the adoption of modular facilities, where the greenfield project development will grow through the expansion of business by operators in Brazil, Chile, and Colombia.

Key Profiled Countries

  • Brazil
  • Colombia
  • Chile
  • Rest of Latin America
    • Argentina
    • Ecuador
    • Peru
    • Venezuela
    • Uruguay
    • Nicaragua
    • Paraguay
    • Mexico
    • Bolivia
    • Honduras
    • The Caribbean

 Key Vendor Analysis

The Latin America data center construction market is continuing to grow in terms of greenfield and modular data center construction projects. The market is witnessing the increased growth in the region, with high adoption of efficient and modular data center infrastructure solutions. The strong presence of vendors across all three categories - electrical infrastructure, mechanical infrastructure, and general construction - is expected to boost the Latin America data center construction market during the forecast period.

Key Construction Vendors

  • AECOM
  • ConstuctoraSudamericana S.A.
  • Flexenclosure
  • Aceco TI
  • ZFB Group

Key Infrastructure Providers

  • ABB
  • Eaton
  • Rittal
  • KINOLT (Euro-Diesel)
  • Schneider Electric
  • STULZ
  • Vertiv

Key Data Center Investors

  • Ascenty
  • Equinix
  • Google
  • ODATA
  • Tigo (MALLICOM)

 Prominent Construction Contractors

  • Fluor Corporation
  • Holder Construction
  • Jacobs
  • Mortenson Construction

Prominent Infrastructure Providers

  • Active Power
  • AIRSYS
  • Alfa Laval
  • Assa Abloy
  • Axis Communications
  • Bosch Security Systems
  • Caterpillar
  • Cisco
  • Cummins
  • Daikin Applied
  • Delta Group
  • Generac Power System
  • Honeywell International
  • Intel DCM
  • Legrand
  • Mitsubishi
  • Munters
  • Nortek Humidity
  • Panduit
  • Siemens

Prominent Data Center Investors

  • EdgeConnex
  • GTD Group
  • Telefonica

Key market insights include

  1. The analysis of Latin America data center construction market provides market size and growth rate for the forecast period 2018-2024.
  2. It offers comprehensive insights on current industry trends, trend forecast, and growth drivers about the Latin America data center construction market.
  3. The report provides the latest analysis of market share, growth drivers, challenges, and investment opportunities.
  4. It offers a complete overview of market segments and the regional outlook for Latin America data center construction market.
  5. The report offers a detailed overview of the vendor landscape, competitive analysis, and key market strategies to gain competitive advantage.

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