South America Data Center Rack Market Size
| Study Period | 2024 - 2030 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2030 |
| CAGR | 11.60 % |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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South America Data Center Rack Market Analysis
The South America Data Center Rack Market value of over USD 2 million in previous year and it is further projected to grow and register a CAGR of 11.16%.
Under Construction IT Load Capacity: The upcoming IT load capacity of the region's data center construction market is expected to reach 1,806.4 MW by 2029.
Under Construction Raised Floor Space: The region's construction of raised floor area is expected to increase 7.8 million sq. ft by 2029.
Planned Racks: The region's total number of racks to be installed is expected to 392,072 units by 2029. Brazil is expected to house the maximum number of racks by 2029.
Planned Submarine Cables: There are Currently, four submarine cable projects are under construction in the region. One such submarine cable, estimated to start service in 2025, is Caribbean Express (CX), stretching over 3472 kilometers with landing points from Cartagena, Colombia, for planned submarine cables.
South America Data Center Rack Market Trends
IT and Telecom to have significant market share
- The cloud, telecom, banking, financial services, and insurance (BFSI) end-user segments are expected to drive significant demand in the regional data center market. The demand for cloud services is promising in Brazil, Chile, Argentina, and other countries.
- In Argentina, the evolution of the legal and regulatory environment for cloud computing has been faster and more in line with recent technological developments compared to other regional countries. Recently, Amazon Web Services (AWS) announced plans to invest approximately USD 800 million over a decade in a new data center in Argentina.
- In the telecom end-user segment of the South American data center market, the regions of Latin America and the Caribbean are projected to amass around 398 million 5G connections by the year 2027. All municipalities in Brazil boasting a minimum of 200,000 residents are anticipated to be equipped with a 5G network, complete with at least one antenna, by July 31, 2026. The 5G spectrum auction held in Brazil in October 2021 garnered an impressive sum of approximately USD 8.5 billion.
- By the year 2035, the introduction of 5G technology in Brazil could potentially yield a substantial economic impact of USD 1.2 trillion, accompanied by a productivity surge amounting to USD 3 trillion. Furthermore, it is envisaged that approximately 10% of network connections across South America will transition to 5G by 2025.
- South America has witnessed a digital revolution in banking and financial services and is quickly adapting. The importance of fintech, neo-banks, and digital wallets across Latin America is rising. The abovementioned end-user segments are anticipated to record positive growth. At least 1,166 fintech initiatives are currently operating across 18 countries, with two out of three reporting to being in the advantage stages of development. Recent research by the Bank of America demonstrates that, in Brazil alone, in 2021, fintech providers such as Nubank, PagBank, Mercado Pago, Ame Digital, and Banco Pan had more than 95 million monthly active users, surpassing traditional Brazilian banks.
Brazil is projected to witness majority of data center construction activities during the forecast period
- Brazil and Chile hold the largest South American data center market shares. The Brazilian government provides incentives through the Regime Especial de Tributação do Programa Nacional de Banda Larga (REPNBL) program, which includes incentives for purchasing infrastructure that help improve colocation services in the country.
- Brazil witnessed an absolute growth of 40% in investments from the 2021 values due to investments from colocation providers such as Ascenty, Scala Data Centers, and ODATA and telecom operators such as GlobeNet Telecom, Ava Telecom, and Embratel. Sao Paulo, Brazil's significant financial capital, serves as the primary data center hub. Other cities, such as Rio de Janeiro and Fortaleza, are major investment locations in Brazil.
- Chile has competitive energy prices, primarily fueled by plans to take advantage of its natural renewable energy generation potential over the coming years. Energy costs have dropped to one-third of what they were five years ago, mainly based on renewable energy that now makes up 46% of the total produced.
- Chile traditionally has some of the region's best telecommunications infrastructure, and two major fiber projects are underway to ensure it will have a fully redundant fiber backbone. These include the state-funded Fibra Optica Austral (FOA) submarine cable connecting the deep south and Gtd's 3,500 km north-south submarine cable. In 2022, colocation operators, such as Scala Data Centers, ODATA, Ascenty (Digital Realty), and EdgeConneX, were the major investors in the Chilean data center market.
- In Argentina, Buenos Aires is the major investment destination, with the identified third-party facilities in the city contributing to over 90% of the existing power capacity. Most existing data centers are smaller facilities built over a limited area.
- The International Renewable Energy Agency (IRENA) stated that renewable energy contributed to around 33% of the overall electricity capacity in 2020 in Argentina, and the country aims to generate 20% of the electricity via renewable sources by 2025. The country aims to be one of the largest data center hubs in the coming time period.
South America Data Center Rack Industry Overview
The South American Data Center Rack Market is fairly consolidated with significant players such as Rittal GMBH & Co.KG, Schneider Electric SE, Legrand SA, Dell Inc., and Hewlett Packard Enterprise.
South America Data Center Rack Market Leaders
Rittal GMBH & Co.KG
Schneider Electric SE
Legrand SA
Dell Inc.
Hewlett Packard Enterprise
*Disclaimer: Major Players sorted in no particular order
South America Data Center Rack Market News
- November 2022: Ascenty, the prevailing market leader in Latin America's data center domain, unveiled its groundbreaking initiative to construct five novel facilities, further cementing its position of preeminence with an aggregate of 33 infrastructures spanning Brazil, Chile, Mexico, and now Colombia. The novel data centers were strategically situated, including Santiago 3, encompassing 21,000 m² with a power capacity of 16 MW; Bogota 1 and 2, each spanning 9,000 m² and equipped with a 12 MW capacity; and finally, So Paulo 5 and 6, boasting an expansive area of 7,000 m² and a commanding capacity of 19 MW each.
- August 2022: The largest vertical data center in Latin America, SGRUTB04, with a total capacity of 18MW, was launched by Scala Data Centers, the region's top platform for environmentally friendly data centers in the hyperscale market. The Tamboré Campus, a complex owned by the firm in Greater So Paulo, Brazil, was where SGRUTB04 is situated. It was devoted to a single hyperscale client and was likely to operate at full capacity for more than ten years. This new Scala data center is 5 meters tall, has seven floors, four dedicated to data halls, and has a total built-out space of over 140,000 square feet, or more than 1,500 racks.
Table of Contents
1. INTRODUCTION
1.1 Study Assumption & Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Dynamics
4.1 Market Overview
4.2 Market Drivers
4.2.1 Increasing Deployment of Data Center Facilities
4.2.2 Growing Cloud Computing Adoption Leading to Investment in Hyperscale Data Centers
4.2.3 BFSI Sector Expected to Hold a Significant Share
4.3 Market Restraints
4.3.1 Increasing Utilization of Blade Servers
4.4 Value Chain/Supply Chain
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Bargaining Power of Buyers/Consumers
4.5.2 Bargaining Power of Suppliers
4.5.3 Threat of New Entrants
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 By Rack Size
5.1.1 Quarter Rack
5.1.2 Half Rack
5.1.3 Full Rack
5.2 By End User
5.2.1 IT & Telecommunication
5.2.2 BFSI
5.2.3 Government
5.2.4 Media & Entertainment
5.2.5 Other End Users
5.3 By Country
5.3.1 Brazil
5.3.2 Chile
5.3.3 Rest of South America
6. COMPETITIVE LANDSCAPE
7. Company Profiles
7.1 Eaton Corporation
7.2 Black Box Corporation
7.3 Rittal GMBH & Co.KG
7.4 Schneider Electric SE
7.5 Vertic Group Corp.
7.6 Dell Inc.
7.7 nVent Electric PLC
7.8 Hewlett Packard Enterprise
7.9 Legrand SA
7.10 Fujitsu Corporation
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
South America Data Center Rack Industry Segmentation
A data center rack is a physical enclosure made up of usually steel housing electronic framework. It is designed to house servers, networking and communication devices, cables, and other data center computing peripherals.
The South American data center rack market is segmented by Rack Size (Quarter Rack, Half Rack, and Full Rack), End-user Industry (BFSI, IT and Telecom, Government, Media and Entertainment), and Country (Brazil, Chile, Rest of South America). The market sizes and forecasts are provided in terms of volume (units) for all the above segments.
| By Rack Size | |
| Quarter Rack | |
| Half Rack | |
| Full Rack |
| By End User | |
| IT & Telecommunication | |
| BFSI | |
| Government | |
| Media & Entertainment | |
| Other End Users |
| By Country | |
| Brazil | |
| Chile | |
| Rest of South America |
Frequently Asked Questions
What is the current South America Data Center Rack Market size?
The South America Data Center Rack Market is projected to register a CAGR of 11.60% during the forecast period (2024-2030)
Who are the key players in South America Data Center Rack Market ?
Rittal GMBH & Co.KG, Schneider Electric SE, Legrand SA, Dell Inc. and Hewlett Packard Enterprise are the major companies operating in the South America Data Center Rack Market .
What years does this South America Data Center Rack Market cover?
The report covers the South America Data Center Rack Market historical market size for years: . The report also forecasts the South America Data Center Rack Market size for years: 2024, 2025, 2026, 2027, 2028, 2029 and 2030.
South America Data Center Rack Market Industry Report
Statistics for the 2024 South America Data Center Rack market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. South America Data Center Rack analysis includes a market forecast outlook to for 2024 to 2029) and historical overview. Get a sample of this industry analysis as a free report PDF download.
