Data Center - LATAM

LATAM

Revenue in the Data Center market is projected to reach US$16.59bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$10.44bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.60%, resulting in a market volume of US$21.79bn by 2029.
In global comparison, most revenue will be generated in the United States (US$123.20bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

Region

Region comparison

Currency

Analyst Opinion

The Data Center market in LATAM is experiencing minimal growth, influenced by factors such as slow adoption of digital technologies, lack of health awareness among consumers, and limited convenience offered by online health services. This is evident across sub-markets of Servers, Storage, and Network Infrastructure.

Customer preferences: In LATAM's Data Center Market, there has been a noticeable increase in demand for cloud-based solutions and services, fueled by the rise of remote work and digitalization of businesses. This trend is driven by the need for scalable and secure data storage and processing capabilities. Additionally, there has been a shift towards edge computing to support the growing demand for real-time data processing and analysis. As more businesses adopt digital solutions, the demand for efficient and reliable data centers in the region is expected to continue to grow.

Trends in the market: In LATAM, the Data Center Market is experiencing a surge in demand for cloud services, with more companies adopting hybrid and multi-cloud strategies. This trend is driven by the need for scalable and cost-effective solutions, as well as the increasing adoption of digital transformation initiatives. Additionally, there is a growing trend of using edge computing to improve network performance and reduce latency. These trends are significant as they highlight the region's increasing reliance on digital infrastructure and the potential for further growth in the data center market. Industry stakeholders must stay updated and adapt to these trends to remain competitive and meet the evolving needs of their clients.

Local special circumstances: In LATAM, the Data Center Market is influenced by unique factors such as the region's high vulnerability to natural disasters and political instability. This has led to the development of specialized data centers with advanced disaster recovery and backup solutions. Additionally, strict data privacy regulations in countries like Brazil and Mexico drive demand for secure and compliant data centers. In Chile, the market is driven by the country's favorable business climate and government incentives, making it an attractive destination for multinational data center companies.

Underlying macroeconomic factors: The growth of the Data Center Market is heavily influenced by macroeconomic factors such as technological advancements, government policies, and investments in digital infrastructure. Countries with favorable regulatory environments and strong investments in data center infrastructure are experiencing faster market growth compared to regions with regulatory challenges and limited funding. Additionally, the increasing demand for cloud computing, big data analytics, and artificial intelligence across industries is driving the need for robust data center solutions, further fueling market growth.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.