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Growing Investment in Data Centers Consolidates Mexican Market

By Héctor Klerian - JLL Mexico
Deputy CEO


Héctor Klerian By Héctor Klerian | Deputy CEO - Mon, 07/31/2023 - 11:19

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Day by day, reality is becoming increasingly digital. Currently, the digital concept has extended to all of society, given that the use of the internet is practically universal, reaching 91% in North America, 87% in Europe, and 73% in the Asia-Pacific region, where subscription rates and cellphone use are even higher, above 90% in most markets, pervading  even the most traditional lifestyles. 

The explosive increase in demand for smart phone-based applications has stimulated an appetite among cloud service providers for more digital infrastructure. Such is the case for hyperscale data centers and media companies in all regions. The forecast for the size of the global market for colocation data centers will increase at a compound rate of 11.3% between 2021 and 2026, and it is estimated that the hyperscale market will grow even faster, at a compound rate of approximately 20%.  

According to the Data Center Map, a platform that locates the number of hyperscale data centers in each country, Brazil has 70 data centers in its territory, Argentina and Chile have 15, and Mexico, 14. Brazil has always been the leader in growth for data centers in the region; however, Mexico has become a very attractive market for the development of such facilities. 

To date, Amazon, Microsoft, and Google are the three main cloud providers, out of which Mexico already has Amazon and Google investments, aside from local companies, such as KIO, for the development of new digital infrastructure facilities capable of providing cloud services on a large scale, thus positioning Mexico as the second-most relevant country in terms of data centers in Latin America. 

Although the current trend indicates that data centers be located outside urban concentrations and in suburbs where they can secure more stable access to an electrical current and water supply, needed for the cooling systems used at these facilities, there are other trends in the sector that determine the installment of data centers in increasingly concentrated spaces. 

The above is ideal for Mexico, given that it has spaces with diverse characteristics, depending on the region of the country. It is predicted that in the next five years, the fastest-growing segments of the data center market will be large centers in key markets, and others in peripheral markets which would provide greater connectivity. 

On the other hand, sustainability and energy efficiency are the main priorities for data center users, operators, and investors, given that environmental impact is highly important to most leading companies. In this sense, Mexico also stands out thanks to the large quantity of new infrastructure that gives the placement of data centers the opportunity to grow with a sustainability strategy from the very beginning, without needing to deal with the transition of inherited technology.

Although numerous challenges still exist that must be sorted to continue to position the Mexican data center industry in an international context, the cloud is becoming a decisive resource for companies’ continuity, and Mexico is taking this opportunity very seriously. Proof of that  lies in the recent creation of the data center association MEXDX, which has the mission of stimulating the Mexican market. 

This association will act as a recognizable point of contact concerning the needs of the industry, an interlocutor with the government, the media, and society at large. It will be responsible for promoting and guaranteeing the image and economic importance of the data center industry, both in the short and long term, ensuring and protecting the position that the Mexican data industry has reached at present, and laying down foundations for the future.  

At this very moment, the entirety of the sector’s attention is concentrated on bettering the sustainability of data centers and promoting public education programs to generate qualified personnel to guarantee the sector’s survival, as it holds so much potential and relevance to the national economy as well as digital society. For this reason, it is crucial to take advantage of the trend and the boom of the moment to combine circumstantial factors, such as the recent surge of nearshoring, which has favored the development of new industrial spaces, and thus give a push in the right direction. 

Photo by:   Héctor Klerian

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