With this post, we are kicking off a new series on “Digital Corridors”, which will explore interconnection between major metros in a region. To understand what we mean by this, wildlife corridors provide a helpful illustration as shown below. A wildlife corridor is a habitat link connecting two or more larger areas of similar wildlife ecosystems separated by human structures such as roads. This allows an exchange of individuals between ecosystems to minimize the negative effects that can occur within isolated populations such as reduced genetic diversity and resilience.
Image source: Smithsonian Magazine, Conservation Leadership Programme[i]
In much the same way, digital corridors connect two or more ecosystems of related companies or industries across regions for partnering, collaboration and the exchange of data to drive business value. And like the exchange of individuals within wildlife ecosystems strengthens those populations, businesses interconnected to more partners and value chain participants tend to be more resilient and better able to adapt to change. According to the fourth annual Global Interconnection Index (GXI), a market study published by Equinix, by the fourth year of their digital transformation, digital service providers and digital leaders have more than twice the number of partners and 35-50% more interconnections than digital followers.
Latin America digital corridors
As the map below highlights, for Latin America (LATAM), there are two major digital corridors:
- West – Mexico, Dallas, Los Angeles (cloud services and content/digital media)
- Central/East – Brazil, Colombia, Miami (network, cloud services and content/digital media)
And two smaller corridors that may be less apparent but hold great value:
- Brazil – New York (financial services)
- Brazil – Miami, Los Angeles (healthcare and life sciences)
Image source: TeleGeography[ii]
Western corridor – Mexico, Dallas and Los Angeles
The bulk of the traffic in this corridor is cloud and content/digital media, followed to a lesser extent by network service providers (NSPs). This is consistent with Latin America traffic growth overall as these three are predicted to be some of the fastest growers of interconnection bandwidth at compound annual growth rates (CAGR) of 62% (Content & Digital Media), 51% (Cloud & IT Services) and 50% (Telecommunications) according to the GXI Vol. 4.
With the exception of Brazil, major cloud providers still have their regions largely located in the U.S. as discussed in the article “How To Connect To The Cloud From LATAM.” This means Latin America enterprises are primarily connecting to the U.S. for cloud and content services, and the preferred route to cloud for organizations in western LATAM and Mexico is via Los Angeles and Dallas. Moreover, the Curie subsea cable system, which starts in Chile and lands directly at the Equinix International Business ExchangeTM (IBX®) in Los Angeles, opens up a Pacific route option to countries in the Southern Cone. Getting to the cloud requires network transport, which is why NSPs also play a prominent role. With more than 200 participating networks and 1.5 terabits per second (Tbps) the Los Angeles and Dallas internet exchanges combined act as gateways between Mexico and the rest of the world.
In addition, with the recent opening of three Equinix IBX data centers in Mexico, Mexico is now positioned to become a key interconnection hub for enterprises and service providers exchanging traffic in this digital corridor. NSPs at these IBX sites can leverage Equinix Internet ExchangeTM to more cost-effectively peer IP traffic with other network providers on Platform Equinix®. NSPs can also directly and securely connect enterprise customers to cloud providers and value chain participants via Equinix Fabric™. Equinix Fabric enables NSPs to provision software-defined interconnections for their customers in minutes through a portal or APIs for quicker response to business demands.
As a case in point, , one of the most prominent and innovative NSPs in Mexico, needed to deliver cloud connectivity that was more reliable than the public internet to its customers. By leveraging Equinix Fabric, C3NTRO was able to move its cloud traffic to a direct, private connection to provide a better user experience with improved security, performance and reliability. As a result, some of its customers benefitted from a 50% reduction in latency.
Central/Eastern corridor – Brazil, Colombia, Caribbean and Miami
Much like the Western corridor, the majority of traffic in central and eastern LATAM is network, cloud and content/digital media services. The shortest and typical path to cloud regions for companies in central/south LATAM and the Caribbean is through subsea cable landings around the Miami area. Similar to the Western corridor, the advent of additional cables, such as the new Malbec subsea cable system between Argentina and Brazil, brings new opportunities. The Malbec cable, which lands directly in Equinix Sao Paulo IBX data centers, enables high-speed access to network, cloud, content and other service providers in Brazil, dramatically cutting latencies from their North American counterparts. This is also expected to double capacity for Argentina.
The Miami Internet Exchange (IX) connects most of LATAM and the Caribbean to the world, and it has more than 150 participants exchanging well above 500 gigabits per second (Gbps) of traffic, more than double the volume in early 2020. The Equinix Sao Paulo IX is also gaining importance in the market having grown to over 135 networks exchanging over 500 Gbps of traffic, nearly four times the volume in early 2020. Two newer IXs, Bogota and Rio de Janeiro, are also growing rapidly. The Bogota IX, comprised of more than a dozen NSPs and content service providers serving the Colombian and Ecuadorian markets, has seen traffic grow by a factor of 50 times since early 2020 and is now exchanging more than 15 Gbps of traffic. The newest Equinix IX in LATAM, Rio de Janeiro, has grown to more than 1 Gpbs of traffic driven by NSPs and content providers including digital media giants like Netflix.
Global service provider Zenlayer wanted to help an Asia-Pacific gaming company expand into Brazil but found that Brazil’s networking infrastructure was not as mature as developed markets. By deploying bare metal servers into the Equinix Sao Paulo IBX data center, local IP transit with Brazilian carriers via the Equinix IX portal, and dedicated connections to their global points of presence (PoPs), Zenlayer was able to deliver the same quality of experience to the gaming customer’s users that it had in other regions with lower latency and cost.
Smaller corridors – Brazil, New York and Los Angeles
These smaller corridors consist of Brazil to New York for financial services and Brazil to Miami, and then Los Angeles for healthcare. A unique fintech environment in LATAM, combined with rapid growth in telemedicine as a result of the pandemic is boosting data exchange between participants in financial and health digital ecosystems.
Brazilian payment processing company Conductor leveraged Equinix Fabric to directly and securely connect its Microsoft Azure and AWS payment platforms. As a result, Conductor reduced customer support tickets by 27% with lower costs, better performance and improved scalability and resiliency.
Read the GXI to learn more.
[i] Smithsonian Magazine, The Jaguar Freeway, Oct 2011; Conservation Leadership Programme, Crucial corridor for plants and wildlife in northern Argentina, Oct 2019.
[ii] TeleGeography, Latin America Telecommunications Map 2019, Internet.
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