Building Hyperscale Data Centers in Emerging Markets

Martin Antunez, Director, Sales Engineering

March 5, 2019

With the emergence of cloud providers—and their large global footprints—enterprises have abandoned traditional dedicated data centers. The need for data centers has not reduced, it has entirely changed. Hybrid cloud, colocation and hyperscale data center solutions are now at the forefront of digital infrastructure.

This shift is all about utility. While the maintenance of a dedicated data center requires extensive specialized knowledge and equipment as well as resources, third party providers offer convenient pay-as-you-go, platform-neutral cloud computing as a service that can scale up or down and be spread across geographies.

Data demands are rising dramatically. The utility of that data is intertwined with the business objectives of those that create and use it. And hyperscale data centers are becoming even more critical.

Data Drivers in High Gear

While this utilization of third party cloud services was initially implemented chiefly by large multinational and digital-facing operations in particular, it’s now commonplace for organizations of all types and sizes. Some of the key drivers of cloud services include emerging data-driven technologies like AI, IoT, virtual and augmented reality, and autonomous vehicles.

With cloud services being employed for increasingly diverse purposes, it is important that organizations have a solution that is flexible enough to accommodate a wide range of needs. That’s why many businesses today deploy some form of hybrid cloud solution. Utilizing both private and public clouds, hybrid solutions enable businesses to grow their workloads in the cloud as their business needs grow while ensuring that their most sensitive data and applications can remain on private servers.

Why Hyperscale?

Hyperscale data centers are the logical response to the explosion in demand for cloud services and hybrid solutions in particular. These are large facilities: roughly the size of a football field on average, with approximately 20 MWs of power each. There are expected to be over 500 hyperscale data center facilities worldwide by 2020. At that time, these facilities are expected to house 68% of all data center processing power and 57% of the data stored in all data centers worldwide.

With the reliance on hyperscale data center facilities on the rise, data center providers like Digital Realty are investing in new projects at a rapid pace. But what constitutes a good site for a hyperscale facility? There are a few key considerations that providers look for. A large plot of land and ready access to fiber are crucial, as is the ability to support our customers’ as well as our own sustainability goals. As of September 2018, 65% of our top 20 customers have renewable energy goals with 45% seeking 100% renewable energy usage. Learn about Digital Realty’s industry-leading sustainability initiatives.

Location, Location, Emerging Market Location.

That is, global locations. While the need for hyperscale data centers is greatest in established metros like the U.S. and Europe, the rest of the world is catching up quickly. Emerging markets offer unique opportunities and challenges. For instance, the Latin American data center market has been growing over the past couple of years. By 2023, the data center market in Latin America is expected to grow at a CAGR of 11.49% with revenues of over $1 billion

So, what considerations are important when it comes to choosing a location for a new data center? Choosing a location begins with the relationship between the hyperscale provider and the local regulations and business environment. Motivation from the local resources is critical to moving projects forward, as is access to affordably priced renewable energy.

Building in Emerging Markets

Some key considerations for potential hyperscale data center deployments in emerging markets:

• The costs of available fiber networks
• Security demands
• The business climate and growth potential
• Labor resources for all needed role types

From a provider’s perspective, it will be interesting to see how hyperscalers approach emerging markets and vice versa.