With Axtel, Equinix Poised to Accelerate Digital Business in Mexico

LATAM tech boom driving interconnection demand across the region

Jon Lin

Digital business is growing rapidly everywhere, but it’s really heating up in Latin America (LATAM). Economic growth and high mobile adoption rates are accelerating mobile commerce and digital services across the region. IDC predicts that over half of LATAM’s GDP will be digitized by 2022, driving almost $380 billion in IT spend.[i] With its proximity to U.S. tech hubs like Dallas and Los Angeles, Mexico is a key part of LATAM’s burgeoning tech boom. Mexico is the world’s eleventh-largest economy and the second largest in LATAM.[ii] It’s also the region’s second-largest fintech market[iii] and an important entry point for global companies doing business in LATAM.

This is leading to growing demand for interconnection in the region, and our customers are telling us they need increased capacity to directly and securely connect the people, things, locations, clouds and data that make digital business work. That’s why earlier today, we announced that Equinix has signed a definitive agreement to purchase three data center facilities in Mexico from Axtel S.A.B. de C.V., a leading telecommunications carrier in Mexico. Along with Equinix International Business Exchange™ (IBX®) data centers located in the metros of Sao Paulo, Rio de Janeiro and Bogota, this will bring our LATAM footprint to ten data centers. The acquisition is expected to close in Q1 2020, subject to closing conditions.

Growing interconnection in LATAM

We are very excited about the expansion. With pent-up demand for interconnection, the timing is right for a definitive move into the Mexico market. Mexico’s IT infrastructure is currently struggling to support the increasing bandwidth requirements and end-user demand that accompany digital transformation. Our acquisition of Axtel’s data centers will accelerate our time to market in the region and provide our customers with the interconnection capacity to meet those demands.

Our new presence in Mexico is expected to open up significant growth opportunities for our enterprise and service provider customers in business and digital ecosystems across Brazil, Colombia, Dallas, Miami and Los Angeles. The facilities sit at the heart of the Axtel network and also provide access to multiple additional carriers for connectivity flexibility. Adding approximately 115,000 square feet of colocation space to the Equinix International Business Exchange (IBX®) data center portfolio, it’s also the second-largest data center platform in Mexico in terms of power capacity (8.5 MW of combined built-capacity). This will make Equinix one of the largest network-neutral data center operators in Mexico.

Here’s a closer look at the new facilities:

Mexico City (two facilities): Mexico City, the capital of Mexico, is one of the largest cities in the world with a population of over 21 million.[iv] Close proximity to the U.S., along with government support and a growing pool of engineering talent, has helped spur strong economic growth in the city, making it an attractive target for tech giants and startups. The two data centers that serve the Mexico City metro are strategically located in Querétaro. Querétaro sits slightly north of Mexico City, directly on the transportation and fiber routes from Mexico City to the U.S. This enables close proximity and low latency to Mexico City. With the second-highest GDP in Mexico, Querétaro also serves as a key economic hub with a large number of multinational companies established there from multiple industries, including aerospace, automotive and consumer goods.[v] Querétaro 1 is the first data center in LATAM with an Energy Cogeneration System and the first in Mexico with International Computer Room Experts Association (ICREA) Level 5 certification for high security and high availability. This carrier-neutral facility has 37,000 square feet of colocation space and 6.3 MW of total built capacity. Querétaro II has the capacity to expand to 60,000 square feet and 8 MW.

Monterrey (one facility): This highly connected facility is located in Northern Mexico in the Monterrey metro area. Located a few hundred miles south of San Antonio, Texas, Monterrey is a key gateway for international business between the U.S. and Mexico. With thriving venture capital and startup activity, Monterrey is also one of Mexico’s fastest growing cities. This carrier-neutral facility has 12,500 square feet of colocation space and 1.2 MW of total built capacity. It is an Uptime Tier 3 facility with ICREA Level 3 certification.

This expansion underscores our commitment to the LATAM region and its potential to become a thriving hub for digital business. Since we first invested in Brazil in 2011, we have continued to add new reach and capabilities to Platform Equinix® across the Americas. As macro trends such as ecommerce, fintech and streaming media continue to drive interconnection demand in LATAM, Platform Equinix will enable Mexican companies to interconnect with the networks, clouds, business partners and customers they need to rapidly grow their business regionally or worldwide.

Learn more about the Equinix and Axtel agreement, by reading the press release.

To learn more about Equinix’s global interconnection platform, read the Platform Equinix Vision paper.

 

[i]IDC, IDC FutureScape: Latin America IT Industry 2019 Predictions, Dec 2018..

[ii]CIA, The World Factbook, Mexico, last updated Sep 2019; Consultancy.lat, Digitization could add $240 billion to Mexico’s GDP by 2025, Jan 2019.

[iii]Finnovista, Mexico exceeds the barrier of 300 Fintech startups and reinforces its position as the second most important Fintech ecosystem in Latin America, Sep 2018.

[iv] World Population Review, Mexico City, May 2019;

[v]Mexico IT, Why Invest in the State of Querétaro?

Jon Lin
Jon Lin President, Americas at Equinix