Equinix is Meeting Demand for Digital Infrastructure in Latin America

Equinix has been doing business in Latin America for 11 years now, investing nearly $2 billion in the region during that time. We’ve seen first-hand how digital transformation has accelerated in the region within the last few years. Only 5% of internet traffic originating in LATAM stayed within the region in 2019, according to TeleGeography. Today, that number has grown to 20%.[1] This is a clear sign that businesses in the region are adopting new digital capabilities quickly, and we are excited about what this means for our customers’ success.

To support this digital boom, Equinix has announced a new data center in Bogotá, Colombia. The new $45 million dollar facility, known as BG2, is scheduled to open during the first half of 2023. The new state-of-the-art facility is about four times the size of our existing BG1 data center and will become one of the largest data centers in Colombia.

During my recent visit to Bogotá, I hosted a town hall with Equinix employees in the area. I truly believe Equinix has some of the most talented, hard-working employees in the industry, and our people have been the common denominator behind everything we’ve been able to accomplish in LATAM so far. That’s why I was thrilled to be able to share with them our plans for future growth in Colombia and across the region.

Meeting with the team in Bogotá

We chose to invest in Colombia because the country has a fast-growing IT sector, part of the fourth-largest economy in LATAM. That economy has boomed over the past decade, driven by thriving energy and manufacturing sectors. The country is also well-positioned to support businesses looking to expand within LATAM, while also staying closely connected to North America. Eleven different subsea cables land in Colombia, allowing for low-latency connectivity within South America and to points north like Miami.

Touring the BG2 construction site

Equinix has also invested in digital infrastructure in Chile and Peru through our recent acquisition of Entel. As part of the $735 million deal, we acquired four data centers in and around the Chilean capital of Santiago, as well as one data center in the Peruvian capital of Lima. The move sought to bring the best of Platform Equinix® to more South American businesses, while also supporting multinationals looking to tap into these two vibrant digital economies.

In addition, Equinix has made investing in Brazil a top priority, in recognition of the rapid growth of the country’s digital economy. This is why we chose São Paulo as the location of the first Equinix xScale data center in LATAM. The facility, which opened in 2021, caters specifically to hyperscalers who want to keep their infrastructure on Brazilian soil.

GXI data reflects the digital growth of LATAM

The digital acceleration happening in countries like Colombia, Brazil and Mexico shows up clearly in the Global Interconnection Index (GXI) 2023, an annual market study published by Equinix. The GXI benchmark forecasts interconnection bandwidth[2] in the Americas to increase at a compound annual growth rate (CAGR) of 39% through 2025, making the Americas the fast-growing region in the world. A closer look at the benchmark data shows that LATAM metros play a big role in driving that growth.

The GXI examines how interconnection bandwidth is growing across two different varieties of metro locations:

• Core metros, which are locations used primarily to provision capacity between networks, clouds, XaaS providers and Enterprise digital infrastructure.
• Edge metros, which are locations used primarily as the interface between the digital and physical worlds—where organizations connect with customers, edge devices and local marketplaces.

In the GXI data, a key pattern emerged across both core and edge metros in the Americas: LATAM metros are increasing interconnection bandwidth very quickly, reflecting the growing digital maturity of the region. For instance, the GXI found São Paulo to be the fastest-growing core metro in the world. At 46% CAGR, it’s growing significantly faster than more established U.S. metros like New York and Washington.

Forecasted interconnection bandwidth growth in Americas core metros

The data also provides insights into the industry ecosystems that are driving interconnection bandwidth growth within each metro. For instance, demand for interconnection bandwidth in São Paulo is largely driven by the Manufacturing and Healthcare & Life Sciences industry ecosystems. Mexico City’s status as a mature financial services hub helped make it the fastest growing among Americas edge metros. At 49% CAGR, it’s outpacing places like Los Angeles and Toronto.

It’s also noteworthy that as a whole, edge metros in the Americas are growing interconnection bandwidth faster than core metros are. This reflects the changing nature of digital business throughout the region. Organizations increasingly need to get closer to end users and set low-latency connections to enable the latest digital applications. Deploying infrastructure and interconnection services in digital edge locations helps them achieve that goal. This growing demand for digital infrastructure in more places throughout LATAM is one reason we’re so excited to be pursuing expansion opportunities like the one we just announced in Bogotá.

Learn how interconnection is enabling the future of digital business

The examples above are just a few of the many ways Equinix aims to provide interconnected digital infrastructure in more places for customers within LATAM and businesses looking to expand there.

To learn more about how interconnection and digital infrastructure are expanding, in LATAM and across the globe, read the Global Interconnection Index 2023 report.

[1] TeleGeography Global Internet Map

[2] Interconnection bandwidth is a measure, calculated in bits/sec, of the capacity provisioned to privately and directly exchange traffic between two parties, inside carrier-neutral colocation data centers.