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Investment in data centers and optical fiber networks reaches US$1,060 million

InvestChile - November,15,2019

Chile is estimated to have between 10 and 15 of these physical mega spaces for storing large volumes of data, and the figure is rising. These are strategic investments.


In recent years, large companies like Google, Claro, Huawei, Entel, Gtd, Sonda and even the Central Bank of Chile have decided to install their own data centers in the country, and the list continues to grow. For example, US giant Oracle has recently decided to join the list, choosing Chile as the location for its own data center.

The trend is clear. According to a survey by the Economy Ministry’s Office for the Management of Sustainable Projects (GPS), there are 11 new data center projects (without including Oracle) and optical fiber connectivity projects in Chile that are at the pre-investment or construction stage or have recently started operation. Together, these initiatives represent an investment of more than US$1,060 million.

Julio Pertuzé, head of the Economy of the Future unit at the Economy Ministry, points out that it is good news that large companies are choosing Chile for operations of this type. “They serve to enable the future digital economy and not only that, these are investments that remain in the country and create jobs, especially for people with high technical capabilities.”

A data center is a large physical space used to house computer systems that can process, serve and store large volumes of data for an organization. Companies previously preferred to have data stored on their own servers but now prefer to keep it in the “cloud”, and data centers are the infrastructure that allows this “cloud” to exist.

The Unisys technology company estimates that there are between 10 and 15 data centers in Chile, and the figure is rising.

According to Thierry de Saint Pierre, president of the Chilean Association of Information Technology Companies (ACTI), data centers have shown exponential growth in recent years. “The forecasts of International Data Corporation (IDC) indicate that the area of cleanroom in Chile will increase by 8.2% in 2020, from 38,840 to 42,040 square meters. Investment is mainly by overseas companies, which see Chile as a very attractive market for services of this type.”

In his opinion, the key factor in this expansion is the digital transformation we are experiencing. “There is a need to keep and access large volumes of information securely and for it always to be available. According to the World Economic Forum, 60% of global GDP will be digital by 2022 and, in this context, companies are taking measures to adapt the operation of their businesses to the new challenges that the economy 4.0 represents,” he says.

The ecological factor
The strong growth of non-conventional renewable energies and the new transmission lines that allow this electricity to be transported to a large part of the country have also been key factors.

Indeed, Google has just signed a 14-year agreement with AES Gener for the supply of renewable energy to its Quilicura data centers. In July, Google - a subsidiary of Alphabet - announced that it will invest US$200 million in the development of a new center in Cerrillos, in addition to US$140 million in the expansion of the Quilicura center and US$150 million in the optical fiber cable in operation between Valparaíso and California.

“The country has offered an ideal combination of elements that contribute to it being energy efficient,” says Alejandra Bonati, communications manager at Google Chile.

In a bid to reduce their demand for energy, some companies have looked to the south of the country where the weather naturally helps to keep equipment cool. For the growth of this pole, the Southern Optical Fiber project will be a decisive factor.

The great challenge

Implementing a data center close to customers was the reason why Claro, a subsidiary of Mexico’s América Móvil, chose to invest in Chile: today it has a data center in Colina and will build the South Pacific optical fiber cable. “The big challenge is that these centers must not only provide storage, but also be able to apply analysis and knowledge of the data for good decision-making. Because it is undeniable that data is becoming the key input for companies,” says Francisco Guzmán, director of Claro Empresas.

But it is not only overseas companies that are investing in these centers. Chile’s Sonda has two large data centers, the heart of the services it offers, in the country. The first is in its corporate building at Teatinos 500 while the second, larger center is located in Quilicura and is currently in the process of expansion. 

To find out more about technology advances in Chile and investment opportunities, see this article.

Source: El Mercurio

Visa tech - ingles

Topics: data- Digital Transformation- Optical Fiber- Digital Hub- Digital Infrastructure- Data Center- Investment in Chile



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