|【英語タイトル】Brazil Data Center Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)|
The Brazil Data Center Market was valued at USD 1.76 billion in 2020 and is expected to reach USD 2.69 billion by 2026 at a CAGR of 7.48% over the forecast period from 2021 – 2026. The growing cloud computing (further fuelled due to COVID-19), increasing penetration of different cloud vendors, government regulations for local data security, and increasing investment by domestic players are significant factors driving the demand for data centers in the country. There are almost 120 data centers in the country as per Cloudscene. The need for low latency and high performance, along with the recent work from home culture due to nationwide lockdown, is mainly accelerating the adoption of data centers located near customers and businesses to enable hybrid multi-cloud ecosystems.
- The Brazilian government is also playing a significant role in the development of local data center infrastructure. According to the government, the country’s General Data Protection Act (LGPD), to be implemented from August 2020, is expected to force many enterprises in the country to migrate their cloud access to private networks and to update their encryption services to extend user data protection.
- As companies in Brazil look to gain greater control of their data in the face of upcoming tighter compliance and protection regulations, data center vendors, like IBM, are targeting customers through providing cloud capabilities along with a hybrid multi-cloud environment. However, due to an increase in cyber-attacks and natural disasters, data security is one of the major restraints in the studied market. Along with this, the energy infrastructure needed to provide uninterrupted cloud and data center services is also a significant challenge the country is facing due to growing adoption.
- Cloud is one of the fastest-growing markets in the country, and the growing investment in the segment is expanding the scope of the studied market. In July 2019, Ascenty opened four data centers in the greater São Paulo area of Brazil. The latest facilities are already fully leased and are located in Jundiai, Paulinia, and Hortolandia. Further, the data centers add 24MW of capacity to Ascenty’s network.
- Due to the growing demand for cloud and data center services, companies such as CenturyLink also expanded its capacity in Rio de Janeiro. In August 2020, AMT, a Brazil-based hybrid cloud services provider, selected CenturyLink to meet its increasing demand for cloud services as part of business expansion with management systems provider Sankhya in the country. China-based Huawei is also planning to build cloud computing nodes or availability zones in Brazil, mainly to expand its global footprint in the cloud segment and compete with US competitors like AWS in the region.
- In June 2020, Amazon Web Services announced to invest BRL 1 billion to expand its data center presence in São Paulo and strengthen its cloud infrastructure in South America. São Paulo is the company’s only South American cloud region and has three EC2 availability zones with five edge network locations. In October 2019, the company announced its plans to spend approximately USD 800 million over a decade on a new South American data center in a free trade zone.
- Furthermore, the recent COVID-19 has put high pressure on end-user companies to support remote working and are fast-tracking their cloud and digitization journeys. Companies like IBM and Microsoft claim that this will boost the country’s data center market as data center expansion enables organizations and government institutions to uphold data sovereignty by keeping data within their legal basis. As Brazil companies look to gain greater control of their data in the face of upcoming tighter compliance and protection regulations, data center vendors, like IBM, are targeting customers by providing cloud capabilities and a hybrid multi-cloud environment.
Key Market Trends
Colocation Type is Expected to Hold Significant Share
- According to the data center map, currently, there are 65 colocation data centers from 21 areas in Brazil. São Paulo and Rio de Janeiro are the major hubs for colocation vendors. Many industry experts expect that the Multi-tenant data center markets will grow 15% in Sao Paulo and 8% in Rio de Janeiro in 2020, owing to the significant expansion of data centers in 2019, and indicators point to a continuing upward trend in the coming months.
- Colocation services are mainly dominating the country’s data center revenue. Most of the local vendors are primarily leveraging on colocation services for growth expansion. Increased merger and acquisition activities have laid the foundation for significant investments in the industry.
- Brazil-based colocation service provider, Ascenty, has two data centers in São Paulo. In June 2020, the company started its operations for its third data center in São Paulo, with BRL 150 million and 4 MW of energy. By the end of 2020, the company announced to have 16 data centers in operation in Brazil. The company is also planning to expand its presence in Mexico and Chile and plan to have 22 data centers across three countries, further expanding its ability to meet national and multinational clients’ needs.
- Equinix provides colocation in Brazil and is one of the country’s significant carrier-neutral data center providers. The company’s data centers in the country’s top two business markets provide 17,695 square meters of colocation space. More than 1,500 companies colocate in Equinix’s data centers in Brazil to connect to business partners and customers in their digital supply chains. Financial services in Brazil are the major end-users of the company’s data center services.
- Moreover, in November 2019, Flexential, a prominent data center colocation and hybrid IT solution provider, announced the expansion of its FlexAnywhere offering, providing customers direct access to Seaborn Networks’ transoceanic platform for the low latency, high-speed, 72-terabits-per-second seamless connection to the Latin American region. The Latin American subsea cable, called Seabras-1, will be spanning from New York/New Jersey, United States to Sao Palo, Brazil.
IT & Telecom Sector Expected to Hold a Significant Share
- IT and Telecom is the most prominent segment for the Brazil Data Center Market. The IT infrastructure demand is the highest for this segment. Colocation providers, who are a substantial adopter of data center racks, are also considered under the study’s scope under the IT & Telecom sector.
- According to the Brazilian Software Association (ABES), Brazil is Latin America’s largest technology ecosystem. Also, according to Equinix’s data, the IT investment in Latin America witnessed a 1.3% growth in 2019 and is expected an upswing of 4-5% in 2020. And in 2020, Brazilians’ investment in the IT industry and telecom sector will be around USD 40-50 billion, respectively. This is expected to provide a massive boost to the cloud computing market, and hence in the data center market.
- The region is undergoing some enormous investment from IT & Telecom providers. For instance, Ascenty launched Its USD 73 million Data Centre Facility In Brazil, and the infrastructure has an available energy capacity of 20 MVA and 12,000 sq m of total area. By the end of 2020, the company aims to complete four more projects, totaling 17 data centers in Latin America (16 in Brazil and Chile).
- Owing to mergers and acquisitions, the increase in the market share of IT & Telecom companies are also rising sharply in Brazil. For instance, in 2019, Digital Colony acquired Brazilian telecom infrastructure solutions provider Highline from Pátria Investments. In April 2020, it also funded Vantage Data Centers’ acquisition of Next Generation Data, and in March, it closed its USD 8.2 billion acquisition of Zayo.
- Cloud storage providers, like AWS, Google, and Microsoft, in the country, are increasing their storage capacities to offer more efficient work-flow on the cloud. These organizations are investing in hyperscale deals. For instance, in Feb 2020, Amazon Web Services announced to invest USD 236 million to expand its data center presence in the Brazilian state of São Paulo and strengthen its cloud infrastructure in Latin America.
The Brazil Data Center Market is fragmented, and the competitive rivalry is high. The key players in this market are Arista Networks, Inc., Cisco Systems, Inc., Dell Technologies Inc., IBM Corporation, among others. Through research & development, strategic partnerships, and mergers & acquisitions, they have been able to gain a stronger hold in the market. These players are gradually growing their presence in the market by offering the latest technologies, thereby increasing their market revenues.
- August 2020 – Artista Network Inc. launched enterprise-grade Software-as-a-Service (SaaS) through its Cloud Vision platform. Through this solution, customers can get the benefits of a single cloud-based service for their network infrastructure. In the data center, CloudVision as-a-Service provides an extension to the customer’s software-driven automation approach without requiring on-site resources to set up and manage the data center network management platform.
- May 2020 – VMware Cloud on Dell EMC launched its second-generation offering to provide enterprises with a scalable infrastructure service option that solves significant financial and IT team challenges. This solution is co-engineered by Dell Technologies and VMware and on-going services managed by VMware. Dell has previously introduced VMware Cloud on Dell EMC, the fully managed Cloud Data Center-as-a-Service that combines the benefits of public cloud and on-premises infrastructure, delivered as-a-service to customers.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Attractiveness – Porter’s Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Market Drivers
4.3.1 Increased Adoption of Cloud and IoT Center
4.3.2 Growing Customer Base for Colocation and Managed Service Providers
4.3.3 Increase in Construction of Green Facilities, Modular Facilities Deployment, and Demand for Edge Datacenter
4.4 Market Restraints
4.4.1 Datacenter Security Challenges & Lack of Skilled Workforce
4.4.2 Higher Procurement Cost for Energy-efficient Infrastructure
4.5 Market Opportunities
5 COVID-19 IMPACT ON CLOUD COMPUTING AND DATA CENTER MARKET
6 MARKET SEGMENTATION
6.1 IT Infrastructure
6.2 Electrical Infrastructure
6.2.1 UPS Systems
6.2.3 Transfer Switches and Switchgears
6.2.4 Rack PDU
6.2.5 Other Electrical Infrastructure
6.3 Mechanical Infrastructure
6.3.1 Cooling Systems
6.3.3 Other Mechanical Infrastructure
6.4.1 Enterprise Data Centers
6.4.2 Managed Services Data Centers
6.4.3 Colocation Data Centers
6.4.4 Cloud Data Centers
6.5 End -user Industry
6.5.2 Telecom and IT
6.5.5 Other End -user Industries
7 COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Arista Networks, Inc.
7.1.2 Cisco Systems, Inc.
7.1.3 Dell Technologies Inc.
7.1.4 Hewlett Packard Enterprise Development LP
7.1.5 Equinix, Inc.
7.1.6 UOL Diveo Inc.
7.1.7 Huawei Technologies Co., Ltd.
7.1.8 IBM Corporation
7.1.9 Lenovo Group Limited
7.1.10 Ascenty Inc.
7.1.11 NetApp, Inc.
7.1.12 Pure Storage, Inc.
7.1.13 Arup Group
7.1.14 Etix Everywhere SA
7.1.15 ABB Ltd.
7.1.16 Digital Colony Management, LLC
8 INVESTMENT ANALYSIS
9 FUTURE OF THE MARKET