The countries that comprise Latin America aren’t a homogeneous set, but they do share some common features – to a greater or lesser degree. Their economies are struggling and their currencies are often weak. Their governments are unstable and often accused of corruption.

Despite this, there is strong investment in the tech sector in the region, and mobile services are expanding. As in other countries, concerns over privacy are driving a move towards more local data storage, and public cloud services are competing to overcome inertia and win over in-house IT.

Data centers are worth $2bn in Latin America, according to the International Computer Room Experts Association (ICREA). Within the constraints mentioned, this year is expected to be strong. Prefabricated data centers are predicted to grow in the region, says Fernando Garcia of Ingenium Engineering. They can be delivered quickly in a market that faces rapid change.

There are a few large greenfield projects or new data centers, but many brownfield jobs and upgrades to existing facilities are being fulfilled by new players, says Garcia.

However, the market for brownfield projects – in other words adjustments, remodels and updates for existing sites – is bullish since companies are beginning to make common sense investments in infrastructure by capitalizing on the existing infrastructure they already own and optimizing further investments.

Brazil

At the time of writing, Brazil is contorted in a political crisis over suspended President Dilma Rousseff’s handling of the economy. Inflation has been at 10 percent and the country has been plagued by the Zika virus, a public health crisis that remains difficult to quantify and predict, and which threatens the success of the Olympic Games.

Nevertheless, the country has seen investment in several major new colocation data centers. CapGemini has put $3.6m (13m reals) into a new data center in Campinas. Meanwhile, Equinix has put $21m (76m reals) into a data center in São Paulo. Players from neighboring countries are also investing. Colombia’s Internexa has opened an 820 square meter data center in Rio.

Data centers are worth $2bn in Latin America. Within certain constraints, this year is expected to be strong. 

Alongside data centers, networks are being developed, and Brazil’s position on the continent makes it a popular landing point for international fiber. Telefonica is linking Rio with Virginia Beach in the US via Puerto Rico, with an 11,000km link due to be operational in 2018.

Meanwhile, contrary to the usual Northern Hemisphere dominance, NEC is laying a 6000km fiber link for Angola Cables directly between Angola and Brazil.

Links along Brazil’s coast are also proving useful to connect its cities: Google is funding the “Junior” system, which will link Rio and São Paulo via a sea-going loop.

Mexico

Mexico’s government appears to be more stable, despite international criticism over its handling of the case of 43 students apparently abducted by police in 2014. The country’s relationship with the US is perhaps more strained, thanks to the inflammatory language of US Republican hopeful Donald Trump.

Despite this, data centers in Mexico appear to be healthy, and the country makes up some 20 percent of the Latin American data center scene. The market for data centers in Mexico grew 18 percent in 2014, and will continue to grtow, according to ICREA.

As elsewhere, telecoms is growing fast, as the middle class expands, and uses more mobile services. Government data centers are not growing so fast in Mexico.

The colocation market in Mexico is dominated by just three players: Kio, Alestra and Triara, which between them own 80 percent of the space. This will make life difficult for any new entrants.

Alestra’s position will be strengthened by its merger with Axtel, a large Mexican telco. Axtel now has six data centers, and says it will invest $250m a year in its infrastructure.

Colombia

After a long-running guerilla war with Marxist groups including FARC, Colombia is becoming more stable as peace talks progress under President Santos. As Colombia is Latin America’s third-largest oil producer, its economy has been hit by the recent fall in oil prices. Despite this, growth in telecoms has driven data center growth. This year, GTD Flywan has opened a Tier III reliable facility in Colombia, and Level 3 has launched its third data center there, in Santiago de Cali, alongside two facilities in Bogota.

As in Brazil, marine cables are used to provide connections between Colombian cities, with Level 3 opening a link between Cali and Buenaventura that depends on a 300km link along the Caribbean coast.

Smaller than the Latin American giants Brazil and Mexico, Colombia is a prime location for subsidiaries of Brazilian and Mexican companies, and is seen as a route to access smaller markets such as Honduras, Guatemala and Nicaragua. Tier IV opened a Colombian subsidiary in 2015 and expects it to provide half of the company’s growth in 2016.

Peru

Peaceful since the end of the insurgency and the self-imposed exile of President Fujimori in 2000, Peru has been consistently one of the fastest-growing economies in the region, although with a GDP of $180bn, it is only one-tenth the size of Brazil.

Nevertheless, Peru’s economy is expected to grow at 5.4 percent per year until 2018, leading the region in growth terms, according to LatinFocus.

The country’s data center sector has been characterized by a slow-moving but well-meaning public sector, while the rest of the tech community shows a will to innovate and get involved in emerging areas of technology, including securityh and satellites.

Recent announcements of data centers in Peru have therefore come from aerospace and academia. The new academic complex of the Universidad Nacional del Altiplano (UNA Puno) will contain a 24,000 square meter data center valued at 30m soles (about $9m), in the basement of a 15-story, high-tech research center.

Meanwhile, the National Commission for Aerospace Research and Development has created a virtual data center to gather images from a Peruvian satellite in low polar orbit.

More conservatively, the ubiquitous Latin American provider Telefonica has achieved Tier III certification for its data center in Monterrico, Surco, and the National Bank has adopted free cooling technology. And the National Bureau of Government of Peru (Onagi) has modernized with a data center, costing $330,000 (991,000 soles).

This article appeared in the May/June issue of DatacenterDynamics magazine.