Equinix Bolsters Digital Acceleration in South America

Through our acquisition of four Entel data centers, we aim to support digital transformation for Chilean businesses

Tara Risser
Gustavo Gutierrez
Equinix Bolsters Digital Acceleration in South America

At Equinix, we recognize that our customers need carrier-neutral digital infrastructure in more places across the world to support their digital transformation and deliver cutting-edge solutions where end users want them. That’s why we’re so proud and excited to announce that today we are officially entering Chile for the first time, thanks to our acquisition of four data centers from Empresa Nacional De Telecomunicaciones (Entel), a leading Chilean telecommunications provider.

The acquisition will include the following facilities in and around the Chilean capital of Santiago:

  • Two data centers in Ciudad de los Valles, which boasts the largest multitenant data center site in Santiago, as well as ample expansion opportunities.
  • A network-dense facility in downtown Santiago, which offers easy access to a key internet exchange.
  • A site in Longovilo, about 100 km away from the Santiago city center, strategically positioned to support disaster recovery and business continuity services.

As part of the integration plan, we expect about 100 Entel employees and contractors to become Equinix employees or contractors. These new additions to the Equinix team will be instrumental in ensuring continuity for existing Entel customers and scaling our market presence in the region. Going forward, Equinix also intends to acquire a fifth data center from Entel, a well-established Tier III site in Lima, Peru.

With this acquisition, we are capitalizing on an attractive expansion opportunity, while also bringing the best of Platform Equinix® to Chilean businesses and multinationals looking to expand into Chile. Combined with our existing presence in Brazil and Colombia, this move extends our data center footprint throughout South America, helping us better support customers from all corners of the continent.

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Chile is growing its digital maturity, but the best is yet to come

Despite its relatively small population, Chile has one of the strongest and most digitally connected economies in Latin America. Its per-capita GDP is the highest in South America, and it has a strong growth rate driven by political and regulatory stability. Many multinational businesses, including some existing Equinix partners and customers, have been attracted to Chile by the growth opportunities it presents.

The country continued to receive new direct investment from cloud hyperscalers even during the worst of the pandemic. In December 2020, Microsoft announced it was establishing a new data center region in the country and bolstering its local cloud offerings.[1] Oracle brought its new Chile cloud region online that same month,[2] while Google followed suit in December 2021.[3]

The growth of cloud services in Chile has been driven by strong customer demand. Latin American businesses have traditionally been forced to access cloud services from the U.S., limiting their ability to adopt new digital services quickly. Now, the growing availability of local cloud services is creating new opportunities for Chilean businesses to power their digital transformations.

As Chile’s pandemic recovery picks up speed, it is expected that the growth of its digital economy will only continue to accelerate. According to IDC, enterprise edge spending in Latin America is expected to reach $8.573 billion by 2024, and in Chile it is anticipated to grow by double digits during the same period. Furthermore, between 2020 and 2024, IDC anticipates that cloud spending in Chile will increase 34.6%.[4]

With this acquisition, we are capitalizing on an attractive expansion opportunity, while also bringing the best of Platform Equinix to Chilean businesses…”

The growth of digital infrastructure in Chile also includes subsea cables. Eight operational cables currently land in Chile, a relatively small number compared to countries like Brazil, but still a strong foundation to drive future growth. In 2019, Google’s Curie became the first new cable system in more than 20 years to extend from Chile to outside of Latin America. The cable provides an important point of connectivity between Chile and the West Coast of the U.S., terminating at the Equinix LA4 data center in Los Angeles.

Ease of doing business makes Chile an attractive expansion opportunity

Throughout its recent history, Chile has shown remarkable commitment to free trade and international cooperation. The country is part of 26 trade agreements with 60 different countries. One example is the Pacific Alliance, a trade bloc committed to the free movement of goods, services, capital and people between Chile, Colombia, Mexico and Peru.[5]

As a result of these partnerships, Chile has strong trade ties across many different regions, including the U.S., Asia-Pacific, and other parts of Latin America. Free trade lowers the cost of importing technology into Chile, which in turn lowers the startup costs for multinationals looking to enter the country.

The ease of cross-border trade is one reason Chile was the top-ranked Latin American country in the World Bank’s Doing Business Index.[6] Chile was ranked particularly well for factors like ease of getting electricity and dealing with construction permits—a clear sign the country is well-suited to support the growth of digital infrastructure in Latin America.

Equinix looks to grow in partnership with Chile

Chile is among the leading renewable energy markets in the world, with a strong presence of solar, hydro and wind power. This is yet another reason the country fits in perfectly with our global expansion strategy: Equinix has committed to achieving 100% renewable energy coverage across existing and future data center sites by 2030. During 2021, we reached 95% coverage across our entire global footprint, putting us closer to achieving our goal than ever before. In the coming months, we look forward to aligning the acquired data centers with our global sustainability strategy.

Equinix was also attracted to Chile by the size of the opportunity in the market. Like many other countries in the region, Chile has a digital divide problem. For instance, during the pandemic, a lack of reliable internet connectivity made remote work difficult in some parts of the country. The Chilean government has shown they understand the scope of the problem and are investing in addressing it.

34.6%

IDC predicts that cloud spending in Chile will increase 34.6% between 2020 and 2024.

The country’s Matriz Digital plan was released in 2019, with the goal of accelerating internet speeds throughout the country, enhancing digital infrastructure via terrestrial and subsea fiber projects, driving greater 5G implementation, and increasing telco investment by 30%.[7] Equinix’s entry into the country is aligned with these goals, and we intend to support them through our investments and partnerships.

What Equinix brings to Chile

While Chile’s data center sector is already among the largest in Latin America, with local companies capable of addressing specific customer requirements, it currently lacks a global colocation provider specializing in interconnection and hybrid multicloud architectures. As a result, availability of interconnection services has been limited up until now. This means that local businesses and multinationals looking to expand in the country have been unable to take advantage of the security, reliability and cost benefits interconnection can offer compared to the public internet.

The entry of Equinix into Chile is set to change that. Businesses operating in Chile will now be able to take advantage of services such as Equinix Fabric™, which offers software-defined interconnection on a global scale. This will help supercharge the digital transformations of Chilean businesses by helping them easily tap into robust, reliable and innovative digital services and experiences, when and where they need them.

Equinix Fabric…will help supercharge the digital transformations of Chilean businesses by helping them tap into robust, reliable and innovative digital services…”
Latin America holds enormous potential, and our commitment to the region has grown since we entered back in 2011. Chilean, Peruvian and multinational companies are thirsting for the digital infrastructure required to thrive in today's economy; with today's expansion, we're broadening digital access and accelerating digital transformation across Latin America, while supporting growth in a responsible and sustainable manner." - Charles Meyers, President and CEO, Equinix

Driving digital transformation across key industry ecosystems

Chile has a strong financial services sector, and financial services companies are among the top customers for retail colocation services in the country. These companies need redundant services across the country to ensure business continuity. This concern is especially relevant in Chile due to the prevalence of earthquakes in the country, like the one in 2010 that knocked out power to 93% of the country’s population. For this reason, disaster recovery sites like the one in Longovilo play a crucial role in the Chilean economy.

Equinix interconnection services can also help Chilean financial service providers expand the value of their digital ecosystems by quickly, securely and cost-effectively connecting with thousands of potential partners and customers from across the globe. This could include getting better access to multinational payment service providers and major credit card networks, as well as driving service modernization via open banking ecosystems.

Another key sector of the Chilean economy is mining: the country is by far the largest producer of copper on the planet. Chilean companies have not been immune to the challenges facing the global mining industry, including falling productivity levels, disruption caused by the pandemic, pricing and demand volatility, and health and sustainability concerns. Despite this, copper still accounts for about 15% of the country’s GDP.

Now, with the presence of Equinix in the country, Chilean miners are well-positioned to prepare themselves for the digital future of mining. By accelerating their adoption of digital technologies like automation, data analytics and artificial intelligence, Chilean mining companies can address the challenges they face and put themselves in a position to thrive in spite of them.

Equinix is committed to being Latin America’s digital infrastructure partner

As we expand further into the Latin American market, we are dedicated to supporting our multinational customers entering Chile for the first time, while also helping local businesses access new digital services from a global ecosystem of thousands of cloud, IT and network service providers.

These local businesses will also gain access to the infrastructure they need to pursue rapid expansion on a global scale, thanks to Equinix IBX® data centers in more than 65 metros across six continents.

To learn more about the overall strategy that drives our globally distributed digital infrastructure, read the Platform Equinix vision paper today.

 

 

[1] Microsoft announces “Transforma Chile” to accelerate growth and business transformation, including a new datacenter region, skilling commitment for up to 180,000 citizens and Advisory Board

[2] Oracle Opens its First Cloud Region in Chile

[3] Data Center Dynamics, “Google opens Chile cloud region”. Dan Swindhoe, December 2021.

[4] IDC, “IDC Chile: Investment in edge technologies will grow in double digits by 2024.” May 2021.

[5] What is the Pacific Alliance?

[6] World Bank

[7] Ministerio de Transportes y Telecomunicaciones, Gobierno de Chile

 

Tara Risser
Tara Risser President, Americas
Gustavo Gutierrez
Gustavo Gutierrez Senior Director, IBX Operations - LA / Mexico