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Data Centers Brazil

Published: September 2013. 120 pages. 12 Tables and Charts

In this new assessment of Brazil, the sixth largest economy in the world, the report highlights changes impacting the country market for data centers - segmented as Hosting/Colocation, Carrier-Owned, IT Outsourcing/Systems Integrators and Enterprise Data Centers - market trends and drivers, price movements, energy pricing, a review of current players and their facilities, identifies potential growth opportunities and projects forecasts over the next three years.

The report is very timely and reveals a wave of repositioning that is impacting the Data Center market with players adopting more aggressive strategies following Data Center builds, the acquisition of infrastructure or the expansion of existing facilities.

The research suggests that the Data Center market is in expansion mode and although confronted by challenges particularly in terms of power supply, growth in local demand - running at more than 15% per annum - appears set to continue as the forecast GDP growth begins to shift upwards over the next few years.
Overall the report conservatively forecasts an increase in technical space of approximately 23% by 2016.

The Data Center industry in Brazil is presently undergoing a tremendous change process. A significant increase in the occupancy rates over the last 18-24 months has resulted in shortages of available Data Center space in different parts of the country. This is particularly true in Tier 2 metropolitan areas outside the key markets of Sao Paulo and Rio de Janeiro where around 90% of facilities are currently concentrated. 22 cities in the country have populations of more than 1 million people. Colocation and Hosting currently represents around 40% of the market (excluding enterprise data centers).

Over the next few years the Brazilian Data Center market will be likely to encounter major issues with older facilities due to the legacy design issues, specifically those related to electrical, mechanical infrastructure and security.

Nevertheless the main story is one of shortages of high quality Data Center space and a consequent increase in co-location and hosting prices. Although late entrants, Telcos who still have a large base of corporate and SME clients are also beginning to offer data center services. New entrants too such as Acenty command considerable resources and infrastructure and are changing the market dynamics by offering high density data center services. The report suggests further room for expansion in supply and identifies companies it believes will accelerate data center growth in the country.

Despite a recent cut in the price of power for industrial users, energy supply still represents a major challenge for data centers. The result is that some of the larger operators are building their own substations to offset the unreliable services from the local electricity supplier monopoly.

Similar to more developed markets 5-7 years ago, the vast majority of new data center builds are still for enterprise or government clients, and only a small proportion are for third-party data centers such as carrier-neutral providers (the latter representing 40-50% of new builds in developed markets). In addition, the report did not identify any wholesale data center providers in the country.

Overall the report provides a timely and comprehensive analysis of the Brazil data center market and finds many opportunities lie ahead as consolidation, expansion and new entrants sustain continued growth.

1 Executive Summary

2 Research Methodology and Report Objectives
2.1 Methodology
2.2 Objectives
2.3 Markets Covered

3.1 Brazil Overview
3.2 Data Center Market Overview
3.2.1 Market capacity (technical space)
3.2.2 Geographic concentrations of data centers
3.2.3 Business models used
3.2.4 Market Segmentation
3.3 Key Market Drivers
3.4 Power
3.5 Connectivity

4.1 Telecommunication vendors
4.2 Outsourcing vendors
4.3 Hosting vendors
4.4 Enterprise Owned Data Centers

5.1 Overview
5.2 Taxonomy of Players by Technical Space
5.3 Top 10 Service providers by technical space
5.4 Forecast of technical space 2014/2015/2016

Table 1: Comparison of Brazilian locations
Table 2: Market Segmentation
Table 3: Major IT Outsourcing vendors
Table 4: Power Pricing by Concession
Table 5: Taxonomy of Players by Technical Space
Table 6: Top 10 Players by Technical Space

Chart 1: Data Centers per Population
Chart 2: Brazil Demographic Distribution
Chart 3: Brazil GDP Growth Rate
Chart 4: Forecast Growth in Technical Space
Chart 5: Forecast Growth in Technical Space by Company
Chart 6: Forecast Growth in Technical Space by Year


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