Demand for colocation data center facilities in the Latin American region could outstrip supply, new research released by DCD Intelligence reveals.

The Latin American Colocation report by DCD Intelligence shows that a larger percentage of data center white space is outsourced in the LATAM region than in many western countries.

This is in line with worldwide trends for colocation in emerging markets according to Nicola Hayes, managing director of DCD Intelligence.

“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,” Hayes said.

“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."

Although supply is increasing, the report shows there is still room for new entrants – especially in cities outside of the major hubs where demand is also increasing, according to the report.

“2012 saw a significant amount of new builds plus expansion to existing facilities in many of the countries researched,” Hayes said.

“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. 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.” (See the figures for growth in new space by country below.)

The Latin American Colocation report also identified that providers with a regional rather than single country presence are, for the most part, international providers rather than native Latin American companies.

“There are indications that some of the larger country providers are looking to establish a presence in neighbouring 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,” Hayes said.

For more information about the report Latin American Colocation please visit the DCD Intelligence website.