‘Soon There Will Be an Edge Data Center in Every Neighborhood’

The proliferation of edge data centers is increasing exponentially amid the growing demand created by the use of mobile devices, and is also a vital step toward the creation of smart cities, an initiative already underway in various Latin American countries.

In the case of Mexico, over the next decade, “each neighborhood of the country’s main cities will have its own center”, according to Eduardo Rocha, the Mexico-based president of the International Computer Room Experts Association (ICREA).

ICREA was founded in 1999 and has 21 country members that include 15 in Latin America, as well as Italy, the Philippines, Singapore, Spain, Switzerland and the US. The association creates norms and certifies specialists and infrastructure in the ITC space, as well as running training courses to foster talent in the industry.

“No sector has grown as quickly in Mexico over the last 20 years as data centers,” he told Nearshore Americas.

Edge data centers are smaller facilities that extend the edge of a network to deliver cloud computing resources and cached streaming content to local end users, and by being positioned closer to those users, they can deliver faster services with minimal latency.

Such centers can also serve as clearing houses for data generated by Internet of Things (IoT) devices that require additional processing, but which are too time-sensitive to be transmitted back to a centralized cloud server.

Rocha’s projected timeline for the installation of such centers in every neighborhood is a decade.

Increased traffic flow

According to Cisco’s Global Cloud Index, annual global data center IP traffic will reach 20.6 Zettabytes (ZB), or 1.7 ZB per month, by the end of 2021, up from 6.8 ZB per year, or 568 exabytes (EB) per month, in 2016. Likewise, global data center IP traffic will grow three-fold over the next five years, with a compound annual growth rate of 25%.

The intense traffic can be validated by a quick glance at Internet Live Stats, while resources such as Ookla’s Speedtest Market Reports allow users to verify broadband speed in more than a dozen countries and regions worldwide.

And parallel to the increase in traffic is the increased speed at which data is obtained. Between December 2017 and November 2018, the global average download speed increased by 15% to 22.82 Mbps, according to Ookla.

By 2021, overall data center workloads and compute instances will have more than doubled compared to 2016 levels, and for cloud will nearly triple over the same period, according to Cisco.

“A rapidly growing segment of data center traffic is cloud traffic, which will more than triple over the forecast period and represent 95 percent of all data center traffic by 2021,” the company said.

The report adds that additional trends influencing the growth of data center and cloud computing include increasing digitization, the widespread adoption of multiple devices and connections, IoT, and the growth of mobility.

“Over time, more and more of the data resident on client devices will move to the data center,” it said.

The proliferation of data centers will also drive growth in the services market.

According to research by Markets & Markets, the data center services market is estimated to grow from US$39.6 billion in 2017 to US$77.5 billion by 2022, an increase of 14%, given the importance of avoiding down time and interruptions, with data center services such as design and consulting, installation and deployment, training and development, and maintenance and support as vital to their efficient functioning.

Rocha highlighted Latin America’s advantage as a location for data centers, contact centers and the outsourcing of processes given the region’s proximity to US time zones, and singled out Colombia as a country in which data and contact center growth will be strong in the coming years given its accessibility and low costs of operation.

But the biggest challenge to overcome is improving communication speed and reducing latency, to make data centers more efficient, and which need to be certified by ICREA to create a standardization, he said.

In general, however, the regulatory frameworks in place across Latin America are not an obstacle to the growth of data centers, Rocha said.

Smarter cities

“The growth of edge data centers is in response to the demand created by the increased use of mobile devices and the exchange of data, and is vital for the continued development of IT and smart cities,” he said.

Several Latin American cities have adopted smart city initiatives. In Brazil, the Rede Cidade Digital is striving to increase broadband access in 300 municipalities, while Colombia’s Plan Vive Digital is an initiative launched by the country’s IT and communications ministry designed to create a national digital ecosystem to expand Internet access.

Chile launched a smart cities initiative in 2018, initially focusing on the cities of Antofagasta, Valparaíso, Chillán, Concepción and Temuco, while Mexico has created a smart cities and municipalities association (AMECI), charged with promoting digital development.

Given the interest and demand in the region to increase countries’ digital capabilities and apply the benefits to society, last September the Inter-American Development Bank (IDB) hosted a panel to discuss the opportunities of developing smart cities in the region.

Rocha says that the need for more data centers is a response to the problem of latency in communications, citing the large audiences for broadcast content as an example of how data transmission needs to be accelerated, and in which edge data centers will play a major role.

Smaller data centers allow the transmission of data to users in close proximity to the center, streamlining the transmission time and reducing latency.

“There is investor interest in this sector, despite the lack of incentives provided by the Mexican government,” he added, as it is companies’ interests to expand data processing capabilities to better serve their customers.

He said conditions are “very easy” for companies to set up data centers in Mexico.

The number of data centers in Mexico is expected to increase by 30% in the short term, according to Datacenter Dynamics.

“The doors are open, although there is uncertainty regarding insecurity and some political aspects, but there are many companies that are expressing an interest in establishing data centers here, given the low operating costs,” Rocha said.