The Brazilian data centre market will put a spotlight on reducing latency in 2020

Eduardo Carvalho | Data Economy by Eduardo Carvalho

In the current technological landscape, global enterprises are migrating at an increasingly faster rate from centralized data centers to a more geographically distributed infrastructure that is closer to the digital edge and to users as well, on par with the intensity already demonstrated in 2019. This refers to the constant digital transformation underway in an IT market that ended 2019 with 1.3% growth in Latin America and is slated to report an upswing of 4.8% in 2020, according to a study by IDC. Specifically in Brazil, investments in 2020 are expected to sit close to USD 48 billion for IT and telecommunication services should see about USD 41 billion.

Consulting firms predict that the digital economy will account for more than 50% of the Latin American GDP by 2022. Growth will be driven by improved offerings, transactions, and relationships between enterprises, partners, and customers. Big data and analytics, cloud, mobility, social media and the Internet of Things (IoT) are technologies that require the largest volume of resources to meet market demands.

In addition to investments, there is information management. Digital payments, self-driving cars and smart hospitals, just to name a few, can generate numerous terabytes of data per day, which need to travel securely and quickly.

By opting for Interconnection – a private and secure route for data traffic between partners –, enterprises from various industries can respond efficiently to the challenges of digitalization. It’s no coincidence that 76% of IT decision makers interviewed in an independent APCO Insight study commissioned by Equinix named Interconnection as a fundamental facilitator in digital transformation.

To stay competitive, enterprises need IT infrastructures that favor real-time interactions between people, things, locations, clouds, and data, often with multiple partners and in different parts of the world. That is why they are being driven to seek more creative and effective ways to expand digitally, amplifying the need for Interconnection. 

The robust expansion in data exchange results in increasing Interconnection Bandwidth. A 63% growth in Latin America’s Compound Annual Growth Rate (CAGR) is expected between 2018 and 2022, according to the 2019 Global Interconnection Index (GXI), an annual study conducted globally by Equinix. Among those surveyed, Latin America is the fastest growing region.


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Data center market continues to grow

This scenario directly impacts the data center market. A 451 Research study estimated a CAGR of 15% in Sao Paulo and 8% in Rio de Janeiro from the MTDC (Multi-tenant Datacenter Markets) offering in 2019 and early 2020. The forecast for the country’s major cities seems to be correct, given that the data center industry expanded last year, and indicators point to a continuing upward trend in the coming months. The positive forecasts regarding the Brazilian economy’s recovery are also contributing to the market’s growth prospects.  

The demand for low latency, high performance and privacy, in addition to a shift towards the new, distributed computing models, will likely accelerate the adoption of data centers located near customers and business partners that can provide them with hybrid multicloud ecosystems.

Major global public cloud providers such as Amazon Web Services (AWS), Microsoft Azure, and Google are active in Brazil and use third-party data centers. There are also the many enterprises and public agencies in Brazil that have been discovering the benefits of this approach.

More Interconnection and data processing capabilities will pave the way for new digital data marketplaces, where data purchasers and providers can perform large-scale transactions easily and securely in data centers located on the edge, with no ties to vendors.

Security will also receive increasing attention in the coming years, regarding both the increase in cyber attacks and privacy and data protection regulations, or even due to natural disasters. In Brazil, the General Data Protection Act (LGPD) will enter into force in August 2020, and is very similar to the European General Data Protection Regulation (GDPR). We will also see many enterprises migrating their cloud access to private networks and updating their encryption services to extend user data protection.

According to Gartner, enterprises in every industry are evolving to become digital and edge computing will be a necessary facilitator. There has been intense migration by enterprises towards the cloud, due to its reach and other features, but edge computing acts in tandem with the cloud, providing more real-time value, better cost reduction and world-class service provision.

Reducing distances between people, companies and data is the focus for 2020.  

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