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Brazil Data Center Market

Brazil Data Center Market By Hotspot (Rio de Janeiro, Sao Paulo Rest of Brazil) By Data Center Size (Large, Massive, Medium, Mega, Small) By Tier Type (Tier 1 and 2, Tier 3, Tier 4 By Absorption Non-utilized, Utilized)-Growth, Future Prospects & Competitive Analysis, 2016 – 2030
Report Book

Published Date: June 2023
Category: IT & Telecom
Report ID: 61303
Report Format: PDF
No of Pages: 238

Rating: Credence Reports

Key Highlights of the Report

The Brazil Data Center market is segmented by hotspot, data center size, tier type, and, absorption. Sao Paulo holds the largest market share in the hotspot segment. Large data centers hold the dominant position among the data center size segment, with medium size data centers being the most popular data center size type. while tier 2 type holds the dominant is the dominant tier type, with utilized leading segment across the absorption segment.

The Brazil Data Center market has been driven by the Increasing Adoption of Cloud-Based Services Driving Data Center Investment. Additionally, a trend of big data & IoT boosting the data center market across Brazil. However, the market also faces significant challenges, the high cost of data centers is expected to hamper the market growth across the country over the forecast period.

Nonetheless, the Brazil Data Center market offers significant growth opportunities, such as the increasing Penetration of Various Cloud Suppliers Across the Country. Additionally, the rise in the digital economy in Brazil is providing an opportunity to embrace ethical standards and sustainable data sourcing in order to satisfy the needs of customers.

Market Overview

The Brazil Data Center market has witnessed steady growth in recent years and is expected to grow at a CAGR of 7.90% between 2023 and 2030. The market was valued at USD 1.9 billion in 2022 and is expected to reach USD 3.23 billion in 2030.

What Are the Main Drivers of The Brazil Data Center Market?

The Brazil Data Center market is driven by several factors, including the adoption of cloud-based services is driving the demand for data center investments across the country which is driving the market.

What Are the Major Challenges Faced by The Brazil Data Center Market?

The Brazil Data Center market also faces several challenges, high cost of data centers is expected to hamper the market growth across the country over the forecast period.

What Are the Growth Opportunities in The Brazil Data Center Market?

The Brazil data center market offers significant growth opportunities in the increasing penetration of various cloud suppliers across the country

Executive Summary

Overview of the Brazil Data Center Market

The need for data centres in Brazil has been rising rapidly in recent years. The physical data centre infrastructure in an organisation is made to share IT operations and tools for storing, processing, and distributing data and applications. Additionally, the data centre in an organisation is built on a network of software programmes and storage options designed to exchange knowledge and data.

Market Definition

A data centre is a building with sophisticated network, computer, and storage equipment that enables shared access to applications and data. In order to maintain the security and high availability of the data, industry standards are in place to help with the design, building, and maintenance of data centre facilities and infrastructures. Data centers come in various sizes, ranging from small server rooms to clusters of buildings spread across different locations. However, they all share a common characteristic: they are crucial assets for businesses, often involving investments in and deployment of the latest advancements in data center networking, computing, and storage technologies.

Data centers consist primarily of three components: compute, storage, and network. However, these components are merely the visible aspects of a modern data center. Underneath the surface, support infrastructure plays a vital role in meeting the service level agreements of an enterprise data center.

Brazil Data Center Market

Market Insights

  • Brazil’s demand for Data Centers was valued at USD 1.9 Billion in 2022 and is expected to reach USD 3.23 Billion in 2030, growing at a CAGR of 7.90% between 2023 and 2030.
  • Sao Paulo is the leading segment in the hotspot and held largest of the share in terms of value in 2022. while Rio de Janeiro is likely to exhibit the fastest CAGR during the forecast period.
  • Large data centers dominated the data center size due to widespread adoption worldwide.
  • While the medium data centers hold the largest CAGR over the forecast period.
  • Tier 3 segment of the tier type held the highest market share.
  • Utilized among the absorption segment is expected to post the highest CAGR during the forecast period & leading the market share with more than 25% share in 2022.
  • The increasing adoption of Software-as-a-Service (SaaS) applications, Infrastructure-as-a-Service (IaaS) solutions, and Platform-as-a-Service (PaaS) offerings has further accelerated the need for data centers. These cloud-based services rely on data centers to provide the necessary computing power, storage, and networking infrastructure to deliver services to end users.

Segmentation by Hotspot

  • Sao Paulo among Hotspot is the leading segment and largest share in value in 2022.
  • Rio de Janeiro will likely exhibit the fastest CAGR during the forecast period.

Segmentation by Data Center Size

  • Large-size data center is the leading segment and largest share in value in 2022.
  • Medium-size data centers will likely exhibit the fastest CAGR during the forecast period.

Segmentation by Tier Type

  • Tier 3 is the leading segment and largest share in value in 2022.
  • Tier 1 and tier 2 will likely exhibit the fastest CAGR during the forecast period.

Segmentation by Absorption

  • The utilized segment governs the demand for the Data Center industry in the world, holding a massive share, and is also expected to grow at a rapid CAGR.

In Brazil, the city of São Paulo stands out as the most interconnected hub, offering a wealth of digital business and financial centers. This makes São Paulo an attractive location for the development of data center facilities. Additionally, the region is experiencing increased investments in the market, driven in part by Brazil’s data localization law known as the Lei Geral de Proteção de Dados Pessoais (LGPD). The LGPD has introduced regulations requiring the storage of data generated within the country, further stimulating investments in data center infrastructure in the region.

In Sau Paulo, the increasing number of data center providers across the city is expected to drive market growth over the forecast period. For instance, in October 2021, Equinix, a leading data center provider, recently unveiled the launch of its latest hyper scale data center facility in São Paulo, Brazil, named SP5x. Situated adjacent to Equinix’s existing SP3 IBX data center in Santana de Parnaíba, the new facility boasts an initial capacity of 5MW in its first phase. Upon completion, it is projected to reach a total capacity of 14.4 MW. Equinix has also committed to investing approximately $116.4 million into the development of this facility.

Overall, the increasing adoption of cloud-based services is driving substantial investment in data center infrastructure in Brazil. The scalability, flexibility, and cost-efficiency of cloud technology, coupled with the ongoing digital transformations and the impact of the pandemic, have created a strong demand for data centers capable of supporting cloud-based services. As a result, the Brazil data centers market is experiencing significant growth as investment continues to pour into expanding data center infrastructure across the country.

Increasing Adoption of Cloud-Based Services Driving Data Center Investment

The market for data centres in Brazil is expanding rapidly due to the rising popularity of cloud-based services, which is encouraging substantial investments in data centre infrastructure. This trend is propelled by several key factors that highlight the transformative impact of cloud technology:

Various businesses across industries are increasingly embracing cloud-based services for their scalability, flexibility, and cost-efficiency. With the help of cloud computing, businesses may access computer resources and services as needed without having to invest much in on-premises infrastructure. This shift towards cloud adoption has led to a surge in demand for data center facilities capable of hosting and supporting these cloud-based services. For instance, in November 2022, Ascent, a Data Center Infrastructure leader across Latin America announced an investment of US$ 1.5 billion (US$290 million) in the construction of five new data centers in South America. The locations of the data centers will be Brazil, Chile, and Colombia.

Increasing Deployment of Data Centers Across the Country

As businesses in Brazil undergo digital transformation initiatives and rely heavily on data-driven operations, there is a growing demand for robust and scalable data center infrastructure. Data centers provide the necessary storage, processing power, and connectivity to support the massive amounts of data generated and consumed by organizations across various industries. The adoption of cloud computing services and hybrid IT environments is on the rise in Brazil. Companies are leveraging cloud solutions for their flexibility, scalability, and cost-efficiency. Data centers play a critical role in hosting cloud infrastructure and supporting hybrid IT architectures, allowing organizations to seamlessly integrate and manage their on-premises and cloud-based systems. Which is driving the growth of Brazil data centers market over the forecast period.

High Cost of Data Centers

Building and maintaining data centers require substantial investments in infrastructure. The cost of land, construction, power supply, cooling systems, and networking equipment can be exorbitant. In Brazil, these costs are often higher than in other countries due to various factors, including limited availability of suitable locations and high import taxes on technology equipment.

Moreover, data centers are power-intensive facilities that consume large amounts of electricity to operate and cool the servers. Brazil’s energy costs are among the highest in the world, primarily due to its heavy reliance on hydropower and the associated infrastructure expenses. The high electricity rates increase operational costs for data centers, making it challenging for businesses to afford the required energy resources.

Increasing Penetration of Various Cloud Suppliers Across the Country

Cloud computing has become a fundamental component of modern business operations. It provides accessibility to a variety of computer resources and services as well as scalability, flexibility, affordability, and affordability. As Brazilian businesses increasingly adopt cloud-based solutions, the demand for data center infrastructure to support these services rises significantly. Several cloud service providers are investing in Brazil to build their businesses and fulfil the rising demand for cloud services there, which is anticipated to present the Brazil data centres market with promising growth possibilities throughout the projected period.

For instance, according to a recent research report published by Information Services Group (ISG) in January 2023, enterprises in Brazil have been rapidly adopting public cloud services. The report highlights the significant contribution of AWS partners in facilitating these cloud migrations and ensuring the smooth operation of cloud environments. ISG, a prominent technology research and advisory firm, released the findings today.

Competitive Landscape

Key Players

The Brazil data center market is highly competitive, with the presence of several key players. Some of the major players in the market and their market share are as follows:

  • Ascenty (Digital Realty Trust, Inc.)
  • DC MATRIX INTERNET LTDA
  • EdgeUno, INC.
  • Equinix, Inc.
  • HostDime Global Corp.
  • Link Datacenter (GPX)
  • Lumen Technologies, Inc.
  • NABIAX
  • ODATA (Patria Investments Ltd.)
  • Quantico Data Center
  • Scala Data Centers
  • Terremark (Verizon)

These companies focus on product innovation, expanding their applications, mergers, and acquisitions to stay ahead in the market. The major players in the Brazil Data Center market constantly strive to stay ahead by introducing new products and innovations.

In June 2023, Brazilian data center company Elea Digital has invested over $20 million in expanding its Rio de Janeiro data center. The data center in question – RJ01 – has doubled its capacity from 2.5MW to 5MW and can house up to 200 more racks in the increased 500 sqm (5,380 sq ft) of data center space. The facility is also connected through the IX.br Internet exchange and has a PUE of 1.4.

In August 2022, in Brazil’s So Paulo, Scala Data Centers has opened a new data center. At the business’ Tamboré campus in So Paulo’s Barueri neighborhood, SP4 is now operational. With 6MW of IT power capacity in use, the site is operational in its initial stage. The second stage of SP4 is anticipated to begin operations in September, adding 6MW of IT capacity.

Summary of Key Findings

  • Increasing popularity of luxury and premium vehicles across the globe is driving the demand for Data Centers.
  • Market segmented by hotspot, data center size, tier type and absorption
  • Sao Paulo is the most popular material, with Rio de Janeiro as the Hotspot segment.
  • Large size data centers are the most common data center size used.
  • With medium size data centers holding the largest CAGR over the forecast period.
  • Tier 3 among the tier type segment holds the dominant position in terms of revenue over the forecast period.
  • The country is highly competitive with key players including Ascenty (Digital Realty Trust, Inc.), DC MATRIX INTERNET LTDA, Quantico Data Center, Scala Data Centers and Smelting and others.

Future Outlook

  • Positive outlook for the Brazil Data Center market with significant growth potential in the Europe region
  • The significant factors driving the demand for data centers in the nation include the expansion of cloud computing, the penetration of various cloud suppliers, government laws for local data protection, and rising domestic player investment.
  • Challenges like data centers require significant investments in infrastructure, power supply, cooling systems, and connectivity. Brazil’s high energy costs, taxes, and import duties on technology equipment contribute to elevated operating expenses, making it challenging for data center operators to offer competitive pricing.

Segmentation

  • By Hotspot
    • Rio de Janeiro
    • Sao Paulo
    • Rest of Brazil
  • By Data Center Size
    • Large
    • Massive
    • Medium
    • Mega
    • Small
  • By Tier Type
    • Tier 1 and 2
    • Tier 3
    • Tier 4
  • By Absorption
    • Non-utilized
    • Utilized

1. Preface
1.1. Report Description
1.1.1. Purpose of the Report
1.1.2. Target Audience
1.1.3. USP and Key Offerings
1.2. Research Scope
1.3. Research Methodology
1.3.1. Phase I – Secondary Research
1.3.2. Phase II – Data Modelling
1.3.2.1. Company Share Analysis Model
1.3.2.2. Revenue-Based Modelling
1.3.3. Phase III – Primary Research
1.3.4. Research Limitations
1.3.5. Assumptions
1.4. Market Introduction
1.5. Market Research Scope

2. Executive Summary
2.1. Market Snapshot: Brazil Data Center Market
2.2. Brazil Data Center Market, By Hotspot
2.3. Brazil Data Center Market, By Data Center Type
2.4. Brazil Data Center Market, By Tier Type
2.5. Brazil Data Center Market, By Absorption

3. Market Dynamics & Factors Analysis
3.1. Introduction
3.1.1. Brazil Data Center Market Value, 2017-2030, (US$ Bn)
3.1.2. Y-o-Y Growth Trend Analysis
3.2. Market Dynamics
3.2.1. Market Drivers
3.2.2. Market Restraints
3.2.3. Market Opportunities
3.2.4. Major Industry Challenges
3.3. Growth and Development Patterns
3.4. Investment Feasibility Analysis
3.5. Market Opportunity Analysis
3.5.1. Hotspot
3.5.2. Data Center Type
3.5.3. Tier Type
3.5.4. Absorption
3.5.5. Geography

4. Premium Insights
4.1. STAR (Situation, Task, Action, Results) Analysis
4.2. Porter’s Five Forces Analysis
4.2.1. Threat of New Entrants
4.2.2. Bargaining Power of Buyers/Consumers
4.2.3. Bargaining Power of Suppliers
4.2.4. Threat of Substitute Hotspots
4.2.5. Intensity of Competitive Rivalry
4.3. Key Market Trends
4.3.1. Demand Side Trends
4.3.2. Supply Side Trends
4.4. Value Chain Analysis
4.5. Technology Analysis
4.6. Analysis and Recommendations
4.7. Marketing Strategy Analysis
4.7.1. Direct Marketing
4.7.2. Indirect Marketing
4.7.3. Marketing Channel Development Trend

5. Market Positioning of Key Players, 2022
5.1. Company market share of key players, 2022
5.2. Competitive Benchmarking
5.3. Market Positioning of Key Vendors
5.4. Geographical Presence Analysis
5.5. Major Strategies Adopted by Key Players
5.5.1. Key Strategies Analysis
5.5.2. Mergers and Acquisitions
5.5.3. Partnerships
5.5.4. Product Launch
5.5.5. Geographical Expansion
5.5.6. Others

6. Economic Impact Analysis
6.1. Recession Impact
6.2. Ukraine-Russia War Impact
6.3. COVID-19 Impact Analysis

7. Brazil Data Center Market, By Hotspot
7.1. Brazil Data Center Market Overview, by Hotspot
7.1.1. Brazil Data Center Market Revenue Share, By Hotspot, 2022 Vs 2030 (in %)
7.2. Rio de Janeiro
7.2.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
7.3. Data Center Size
7.3.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
7.4. Rest of Brazil
7.4.1. Brazil Data Center Market, 2017-2030 (US$ Bn)

8. Brazil Data Center Market, By Data Center Type
8.1. Brazil Data Center Market Overview, by Data Center Type
8.1.1. Brazil Data Center Market Revenue Share, By Data Center Type, 2022 Vs 2030 (in %)
8.2. Large
8.2.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
8.3. Massive
8.3.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
8.4. Medium
8.4.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
8.5. Mega
8.5.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
8.6. Small
8.6.1. Brazil Data Center Market, 2017-2030 (US$ Bn)

9. Brazil Data Center Market, By Tier Type
9.1. Brazil Data Center Market Overview, by Tier Type Massive
9.2. Brazil Data Center Market, 2017-2030 (US$ Bn)
9.2.1. Brazil Data Center Market Revenue Share, By Tier Type, 2022 Vs 2030 (in %)
9.3. Tier 1 and 2
9.3.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
9.4. Tier 3
9.4.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
9.5. Tier 4
9.5.1. Brazil Data Center Market, 2017-2030 (US$ Bn)

10. Brazil Data Center Market, By Absorption
10.1. Brazil Data Center Market Overview, by Absorption
10.1.1. Brazil Data Center Market, By Absorption, 2022 vs 2030 (in %)
10.2. Non-Utilized
10.2.1. Brazil Data Center Market, 2017-2030 (US$ Bn)
10.3. Utilized
10.3.1. Brazil Data Center Market, 2017-2030 (US$ Bn)

11. Company Profiles
11.1. Ascenty (Digital Realty Trust, Inc.)
11.1.1. Company Overview
11.1.2. Product /Services Portfolio
11.1.3. Geographical Presence
11.1.4. Financial Summary
11.1.4.1. Market Revenue and Net Profit (2019-2022)
11.1.4.2. Business Segment Revenue Analysis
11.1.4.3. Geographical Revenue Analysis
11.2. DC MATRIX INTERNET LTDA
11.3. EdgeUno, INC.
11.4. Equinix, Inc.
11.5. HostDime Global Corp.
11.6. Link Datacenter (GPX)
11.7. Lumen Technologies, Inc.
11.8. NABIAX
11.9. ODATA (Patria Investments Ltd.)
11.10. Quantico Data Center
11.11. Scala Data Centers
11.12. Terremark (Verizon)

List of Figures
FIG. 1 Brazil Data Center Market: Research Methodology
FIG. 2 Market Size Estimation – Top Down & Bottom up Approach
FIG. 3 Brazil Data Center Market Segmentation
FIG. 4 Brazil Data Center Market, by Hotspot, 2022 (US$ Bn)
FIG. 5 Brazil Data Center Market, by Data Center Type, 2022 (US$ Bn)
FIG. 6 Brazil Data Center Market, by Tier Type, 2022 (US$ Bn)
FIG. 7 Brazil Data Center Market, by Absorption, 2022 (US$ Bn)
FIG. 8 Attractive Investment Proposition, by Hotspot, 2022
FIG. 9 Attractive Investment Proposition, by Data Center Type, 2022
FIG. 10 Attractive Investment Proposition, by Tier Type, 2022
FIG. 11 Attractive Investment Proposition, by Absorption, 2022
FIG. 12 Attractive Investment Proposition, by Geography, 2022

List of Tables
TABLE 1 Market Snapshot: Brazil Data Center Market
TABLE 2 Brazil Data Center Market: Market Drivers Impact Analysis
TABLE 3 Brazil Data Center Market: Market Restraints Impact Analysis
TABLE 4 Brazil Data Center Market, by Competitive Benchmarking, 2022
TABLE 5 Brazil Data Center Market, by Geographical Presence Analysis, 2022
TABLE 6 Brazil Data Center Market, by Key Strategies Analysis, 2022
TABLE 7 Brazil Data Center Market, by Rio de Janeiro, 2017-2022 (US$ Bn)
TABLE 8 Brazil Data Center Market, by Rio de Janeiro, 2023-2030 (US$ Bn)
TABLE 9 Brazil Data Center Market, by Sau Paulo, 2017-2022 (US$ Bn)
TABLE 10 Brazil Data Center Market, by Sau Paulo, 2023-2030 (US$ Bn)
TABLE 11 Brazil Data Center Market, by Rest of Brazil, 2017-2022 (US$ Bn)
TABLE 12 Brazil Data Center Market, by Rest of Brazil, 2023-2030 (US$ Bn)
TABLE 13 Brazil Data Center Market, by Data Center Size, 2017-2022 (US$ Bn)
TABLE 14 Brazil Data Center Market, by Data Center Size, 2023-2030 (US$ Bn)
TABLE 15 Brazil Data Center Market, by Large, 2017-2022 (US$ Bn)
TABLE 16 Brazil Data Center Market, by Large, 2023-2030 (US$ Bn)
TABLE 17 Brazil Data Center Market, by Massive, 2017-2022 (US$ Bn)
TABLE 18 Brazil Data Center Market, by Massive, 2023-2030 (US$ Bn)
TABLE 19 Brazil Data Center Market, by Medium, 2017-2022 (US$ Bn)
TABLE 20 Brazil Data Center Market, by Medium, 2023-2030 (US$ Bn)
TABLE 21 Brazil Data Center Market, by Mega, 2017-2022 (US$ Bn)
TABLE 22 Brazil Data Center Market, by Mega, 2023-2030 (US$ Bn)
TABLE 23 Brazil Data Center Market, by Small, 2017-2022 (US$ Bn)
TABLE 24 Brazil Data Center Market, by Small, 2023-2030 (US$ Bn)
TABLE 25 Brazil Data Center Market, by Tier 1 and 2, 2017-2022 (US$ Bn)
TABLE 26 Brazil Data Center Market, by Tier 1 and 2, 2023-2030 (US$ Bn)
TABLE 27 Brazil Data Center Market, by Tier 3, 2017-2022 (US$ Bn)
TABLE 28 Brazil Data Center Market, by Tier 3, 2023-2030 (US$ Bn)
TABLE 29 Brazil Data Center Market, by Tier 4, 2017-2022 (US$ Bn)
TABLE 30 Brazil Data Center Market, by Tier 4, 2023-2030 (US$ Bn)
TABLE 31 Brazil Data Center Market, by Non-Utilized, 2017-2022 (US$ Bn)
TABLE 32 Brazil Data Center Market, by Non-Utilized, 2023-2030 (US$ Bn)
TABLE 33 Brazil Data Center Market, by Utilized, 2017-2022 (US$ Bn)
TABLE 34 Brazil Data Center Market, by Utilized, 2023-2030 (US$ Bn)

Frequently Asked Questions

What is the current size of the Brazil Data Center market?

The Brazil Data Center market was valued at USD 1.9 Billion in 2022.

What is the expected growth rate of the Data Center market between 2023 and 2030?

The Data Center market is expected to grow at a CAGR of 7.90% between 2023 and 2030, reaching USD 3.23 Billion in 2030.

Which Hotspot segment is leading the market share in terms of product type?

Sau Paulo is the leading segment by hotspot, holding around half of the share in value in 2022.

Which data center size governs the demand for Data Center in the world?

The large segment governs the demand for Data Center worldwide, holding a massive share of nearly 45% in 2022.

Which tier type segment is expected to post the highest CAGR during the forecast period?

The tier 1 and 2 segment is expected to post the highest CAGR during the forecast period.

Which absorption type is fueling the growth of the Data Center industry?

Utilized type segment is fueling the growth of the Data Center industry, with nearly a two-fifth share in 2022.

Who are the major players in the Brazil Data Center market?

The top players include Ascenty (Digital Realty Trust, Inc.), DC MATRIX INTERNET LTDA, EdgeUno, INC., Equinix, Inc., HostDime Global Corp., Link Datacenter (GPX), Lumen Technologies, Inc., NABIAX, ODATA (Patria Investments Ltd.), Quantico Data Center, Scala Data Centers, Terremark (Verizon)and others.

What is the major market driver of the Data Center industry?

Increasing adoption of cloud-based services driving data center investment is the major market driver.

What are the major market restraints of the Data Center industry?

The high cost of data centers is restraining the growth of the Data Center industry.

What are the major market opportunities of the Data Center industry?

Increasing penetration of various cloud suppliers across the country segment opportunities for the Data Center industry.

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