Brazil Colocation Market - Forecasts from 2024 to 2029

Brazil colocation market is expected to reach US$1.980 billion in 2029 growing from US$1.195 billion in 2022, at a CAGR of 7.47%.

Brazil is one of the major Latin American nations that holds high potential for investment in ICT infrastructure and initiatives to bolster corporate and startup establishments.

Major cities such as Sao Paulo harbor various BFSI, healthcare, machinery, and IT service providers, and its growing service sector is one of the major GDP contributors. Moreover, major market players namely Scala Data Centers, Equinix Inc., and HostDime Global Corp have a well-established presence in the Brazilian market. Such factors are expected to bolster the demand for colocation facilities for managing complex data.

Market Drivers

Technological innovations and digital transformation drive market growth

In Brazil, the emphasis on technological adoption and digital transformation of corporations and industries has led to investment in necessary data center facilities to address the growing complexities regarding data storage and analysis which has positively impacted the Brazil colocation market. For instance, in October 2022, Scala Data Centers announced the construction of its hyperscale facility having 7.2MW of customized capacity in Southern Brazil which would involve an investment of R$250 million.

Furthermore, in September 2022, the Inter-American Development Bank approved investments of US$15 million to the government of Alagoas, Brazil for the digital transformation of the state, including the development of data strategies. Such investments will boost the establishment of major data centers such as colocation data centers for the betterment of broadband and internet coverage in Brazil.

Growing demand for better data transmission bolsters the market growth

Growing investments in IoT applications are boosting the market demand for colocation in Brazil. Colocation provides speed & security benefits to IoT applications, and it enables the rapid expansion of IoT data networks through the allocation of bandwidth, space, and power. The growing demand for better data transmission modules is boosting companies to invest in IT applications and startups related to such services. For instance, in May 2021, the Brazilian Development Fund collaborated with Qualcomm Ventures to launch a capital fund of US$45 million which would be invested in IoT startups in Brazil for the expansion of IoT & connectivity spaces.

Large enterprises are expected to show significant growth

By enterprise, the Brazil colocation market is analyzed into small, medium, and large, where large enterprises are estimated to grow at a significant rate fueled by the expansion of the operations by major firms operating under major sectors such as healthcare, defense, retail & eCommerce, and BFSI which is anticipated to drive demand for additional storage spaces.

Key Developments

• In November 2023:Transaction Network Services (TNS) launched its colocation services in Sao Paulo in collaboration with Brazil’s largest stock exchange B3 S.A. The partnership strengthened TNS solutions for the financial market and enabled it to expand B3’s global access.
• In November 2023:IHS Brazil in collaboration with I-System jointly launched many connectivity services inclusive of colocation, Small Cell & In-Building solutions, and Buit-To-Suit services. The new launch had put IHS as the leading shared communication infrastructure provider in Latin America.

Segmentation:

By Colocation Model

• Retail
• Wholesale
• Hybrid

By Enterprise Size

• Small
• Medium
• Large

By End-Use Industry

• BFSI
• Communication and Technology
• Education
• Healthcare
• Media and Entertainment
• Retail & E-Commerce
• Others