Data Center - South America

South America

Revenue in the Data Center market is projected to reach US$11.19bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$6.74bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.62%, resulting in a market volume of US$14.71bn 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 South America is experiencing minimal growth, influenced by factors such as the increasing demand for digital technologies, rising awareness of data management, and the convenience of online services. This growth is supported by the sub-markets of Servers, Storage, and Network Infrastructure, which are crucial components for data center operations in the region. However, challenges such as limited infrastructure and high operational costs are impacting the overall growth rate of the market.

Customer preferences: In South America, there has been a noticeable trend towards increased reliance on cloud-based services and data storage solutions, driven by the growing digitalization of businesses and government agencies. This shift is also influenced by the region's rapidly expanding e-commerce market and the need for efficient and secure online operations. As a result, there is a growing demand for advanced data center infrastructure and services, with a particular focus on data security and compliance. Additionally, the rise of remote work and virtual collaboration has further emphasized the importance of reliable and scalable data center solutions in the region.

Trends in the market: In South America, the Data Center Market is experiencing a surge in demand for cloud services, driven by the increasing adoption of digital transformation strategies by businesses. This trend is expected to continue, with more companies turning to cloud solutions for cost savings and scalability. Additionally, there is a growing focus on data security and privacy, leading to the implementation of stricter regulations. This presents opportunities for data center providers to offer secure and compliant solutions. The industry is also witnessing a rise in edge computing, as businesses seek to reduce latency and improve network performance. This trend is significant for stakeholders as it allows for faster and more efficient data processing, leading to improved customer experiences. However, it also poses challenges in terms of infrastructure and network connectivity. Overall, the current trends in the Data Center Market in South America highlight the importance of agility and innovation in the industry, as well as the need for collaboration between data center providers and businesses to meet evolving demands.

Local special circumstances: In South America, the Data Center Market is heavily influenced by the region's geographical and cultural diversity. The varying levels of technological infrastructure and adoption across countries, such as Brazil, Argentina, and Colombia, pose unique challenges and opportunities for data center providers. Additionally, regulatory differences, such as data privacy laws and government support for technological development, also impact the growth of the market. These local factors play a significant role in shaping the dynamics of the Data Center Market in South America, making it distinct from other markets around the world.

Underlying macroeconomic factors: The Data Center Market in South America is influenced by macroeconomic factors such as technological advancements, government policies, and investment in digital infrastructure. Countries with favorable regulatory environments and strong investment in digital technologies are experiencing faster market growth compared to regions with regulatory challenges and limited funding. The increasing demand for data storage and processing capabilities, driven by the growth of industries such as e-commerce, cloud computing, and digital media, also contributes to the growth of the Data Center Market in South America. Additionally, the rising adoption of emerging technologies such as artificial intelligence, Internet of Things, and big data analytics is further fueling the demand for data centers in the region.

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.