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Brazil infra players rush to bring edge data centre investments online

Retail, manufacturing and digital transformation across the board is driving the need to rapidly expand footprints across the country.

By João Marques Lima

Co-founder and Editor, The Tech Capital

4 Mins

August 24, 2021 | 12:00 AM BST

The rapid adoption of cloud services and increase in data consumption across Latin America’s largest country is driving a surge not only in large scale data centre construction but also within the newer space of edge computing sites.

The news come from Brazilian telco Embratel and secure access service edge (SASE) giant Netspoke which are both expanding their edge portfolios in the country.

Firstly, Embratel is due to open three new sites before the end of the year with the company currently planning the development of 12 other facilities to come online in 2022.

Speaking to local media, head of digital solutions Mário Rachid said the 50 million reais (US$9.2m) expansion comes as an answer to demand from the retail and industry 4.0 sectors.

The edge facilities are being built in different locations between Manaus, in the north of the country, and the south and southeast of Brazil.

Embratel, which runs six larger data centre facilities in Brazil, will also begin expansion works at its flagship Lapa, São Paulo, building next year.

Elsewhere, Netspoke has also said it will be opening new edge facilities in Brazil as the company gears up the opening of its new data centre in Lima, Peru.

The software company is planning two edge facilities in Brazil, one in Rio de Janeiro and the other in the capital, Brasilia.

Alain Karioty, regional director for Latin America at Netskope, said: “We are seeing tremendous growth in the Latin American region, with organisations eager to adopt a SASE approach in order to accelerate the transformation of their security architecture. 

“These transformations are being driven by the erosion of the traditional IT perimeter, with business units adopting new cloud technologies to support business goals.”

Netskope NewEdge, the business’ segment under which the edge data centre operate, has existing coverage in Latin America through data centres in Bogota, Colombia; Santiago, Chile, Buenos Aires, Argentina and São Paulo, Brazil.

Expanded APAC NewEdge coverage was recently announced in Australia, New Zealand, The Philippines, and Singapore, and recent EMEA additions included supplementary coverage in the UK, France, and the UAE, as well as new presence in Switzerland.

Netskope has recently attracted $300 million in new investment, including from Base Partners, a technology-focused growth equity firm based in Sao Paulo, achieving a post-money valuation of $7.5 billion.

Brazil is the top data centre market in Latin America, driving over 40% of the overall investment in the region.

The country’s data centre market size is expected to grow at a CAGR of over 9.63% during the period 2020−2026 reaching $3.09 billion, according to Arizton Advisory and Intelligence.

Analysts said that some of the major market drivers in Brazil are increasing adoption of cloud, the impact of COVID-19, and the introduction of the General Data Protection Act (LGPD) by Brasilia.

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João Marques Lima

Co-founder and Editor, The Tech Capital

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