Chile: Latin America’s up-and-coming cloud region
Chile is the regional hub for some of the biggest names in the data centre industry and over the last year, we’ve provided tailored architectural services for cloud providers and operators across Latin America. But why are we seeing so much growth in this market and what role do we play in helping companies keep up with the surge in demand?
We interviewed Hyphen’s Office Head in Santiago, Matías Menichetti, to find out more.
Why are major cloud providers setting their sights on Chile as a regional hub for data centres?
Since the government announced its Digital Transformation Strategy in 2019, Chile has seen improvements to its international fibre optic infrastructure, 5G wireless technology and local fibre optic interconnectivity.
This has made it an attractive location for investors in the sector and although Brazil may have the largest economy and data centre market in Latin America, Chile has positioned itself as one of the leading countries for digital growth in the region.
Nowadays it’s common to read about the deployment of new data centres across the country, however, regardless of scale, it’s no longer about “who gets there first” but more about “reach”.
With a population of more than 650 million people, the race to dominate cloud services in Latin America continues and companies are focusing their attention on improving the reliability of their facilities. Location plays a big part in this, as does developing a growth strategy (a single campus is no longer enough to provide the level of cyber security that end-users require).
Why is it important for data centre developers to get architects involved at the feasibility stage in an emerging market such as Chile?
The first and most important step in any feasibility assessment is site selection. As architects, we help clients to identify high-performing sites and this plays a vital part in the success of any project.
The type of data centre – whether it’s edge, colocation, enterprise or cloud – determines which criteria take priority in site evaluations. What works for cloud data centres may not suit the strategy for colocation or enterprise projects.
How important is local understanding?
In the last year, we’ve carried out numerous feasibility studies for international DC clients in Latin America and having a local team of architects and consultants on the ground has been essential for keeping up with the region’s evolving codes and standards, conducting feasibility studies and also, in terms of mobility (as travel has been largely restricted during the pandemic).
Understanding the political and socio-economic factors in each region is equally as important as, say, evaluating technical aspects such as power capacity or water availability and we use our international experience and local knowledge to help clients narrow down their selection.
Once initial site appraisals have taken place, we then carry out full site due diligence to assist clients in making their final decision. At this stage, it’s not uncommon to move forward with permitting and formal power and water requests to save time later on.
Important decisions must be made at every stage of a DC project and as well as being able to provide technical support, we are occasionally called on to help with commercial negotiations and deployment strategies – especially, when it involves build-to-suit data centres.
Where do you see future growth opportunities for our DC clients in Latin America?
The global data centre market continues to grow at an unprecedented rate. According to Gartner, end-user spending on global data centre infrastructure is projected to reach $200 billion in 2021, an increase of 6% from 2020.
2021 is also expected to be a year of diverse activity across nearly all regions, with a mix of continued hyperscale self-build, build-to-suit deals, and colocation facility expansions or reconfigurations. Such demand is driving a massive requirement for site selection, due diligence and design services and this is something that we’ve experienced first-hand.
Looking for your next project location? Check out our permitting map for Latin America for tips and insights into local planning regulations.