Data Centers: The Foundation of a Digital Economy

Q: What data management elements or concerns determine the basis of IDCA standards?

A: One language and a consistent set of minimum standards across design, operation and management are fundamentally important to the efficiency, resilience and support of data centers. A baseline allows private and public stakeholders to understand the industry on equal footing at both a regional and global level, which is a necessary prerequisite to the formation of a global digital economy. Furthermore, it facilitates the identification of more efficient ways to innovate, operate and maintain high uptimes, all core industry concerns across geographic boundaries.

Q: How are processes evolving as new technologies and new security threats arise?

A: The innovation of new technologies has and will continue to engender security threats, which serves to underscore the importance of routine education and training in both technologies and accompanying processes. No technology is infallible. This is best exemplified by blockchain technology, which was developed to be the unhackable foundation of cryptocurrency; instead, it presented unique vulnerabilities that confirmed that risks cannot be entirely sidestepped.

Q: What investments does Mexico need to prioritize as an emerging digital innovation hub?

A: If Mexico is to remain a major recipient of foreign investment, the country needs to prioritize public spending in three core domains: energy distribution, telecommunication infrastructure and education. The production and distribution of energy in Mexico is highly fragmented. Energy is an inflexible input that is indispensable to data centers, which are known to have represented 4 percent of global electricity consumption in 2021, according to ENGIE. An uneven energy grid is likely to limit the construction of data centers to energy clusters, highly contested zones that threaten to cap the overall industry.

The rollout of the 5G network is another key public infrastructure investment. However, the development of 5G has been repeatedly delayed due to outdated legacy infrastructure that requires significant investment to update. As a result, 5G coverage remains limited to major urban centers, such as Mexico City, Monterrey and Guadalajara, but connection becomes limited at a city’s outskirts. The accelerated development of this infrastructure is fundamental to improve latency, which has important implications beyond data centers. Other industrial sectors are also looking forward to the intelligent capacity of Industry 4.0.

Public and private entities must invest in the education and training of the talent needed to support the current and long-term demand for operational personnel. The existing pool of capable talent is quickly being exhausted by the simultaneous migration of various data center companies to Mexico. Companies are discovering a skills gap among their personnel, mainly concerning their inability to operate and maintain the company’s equipment. This is an added cost companies have not accounted for but will have to accommodate to insure their equipment and ensure operational fluidity.

Overall, while Mexico is undoubtedly a key regional market, if it fails to support the expansion of vital infrastructure and the preparation of qualified talent, it risks losing international investment to other countries in Latin America. 

Q: What role do federal-state partnerships and legislative bodies play and how much influence do they have in relation to the economic and digital transformation?

A: It is essential to involve all stakeholders, including users, service providers, vendors, data center companies, integrators and federal state entities. Governments, in particular, play a fundamental role in this process because they have the authority to legislate and establish regulation that will affect all parties involved. Nonetheless, at least initially, the federal government will rely heavily on the private industry for data and determined standards of operations on availability. IDCA is helping guide this process. The organization aims to communicate with Mexico’s industry leaders to identify the needs necessary for the development of a common language. This process has only begun in Mexico and Latin America but once standards and requirements become formalized, they will facilitate interparty communication and accelerate the realization of a digital economy.

Q: How does Mexico stand to benefit from partnering with IDCA during its digital transformation?

A: For the past few months, we have been working alongside the federal government to formulate a plan that will position Mexico in the spotlight of international investors. Capitalizing on surging interest surrounding Mexico’s burgeoning digital economy, IDCA formulated a roadmap that will help capture the capital needed to establish a robust and competitive digital economy. Given that we have replicated this process with countries throughout the EU and the Americas, Mexican legislators and stakeholders can be confident that we have their best interests in mind. Fundamental to the successful realization of this vision is the development of a robust and competitive data center industry.

Q: What objectives does IDCA hope to accomplish for the 2022-23 fiscal year?

A: We have just started operations in Mexico and Latin America, so our first objective is to magnify our presence and become top of mind among key industry leaders and legislators. By extension, we aim to nurture our relationships with them to begin to get training underway across the country as fast as possible. Overall, IDCA wants to play a supporting role in the development of a digital economy that benefits all.

The International Data Center Authority (IDCA) was established to streamline, structure, standardize, educate and give direction to the world of cloud, AI, IoT, big data, blockchain, data centers and IT.