Market Trends of South America Data Center Physical Security Industry
The IT & Telecom Segment to Hold Significant Share
- The demand for telecom data center construction in the country is increasing for physical security solutions. In South America, government biometric identification initiatives and the increasing prominence of biometrics in various sectors are expected to drive market growth.
- The rollout of 5G networks would strengthen the nation's digital economy and increase demand for high data center storage infrastructure. The arrival of 5G is expected to bring a major increase in speeds, low latencies, and an unforeseen level of network capabilities.
- The Chilean government has substantially invested in fiber-optic networks, with connections reaching more than 90% of the population. Due to this, most Chilean families now have access to high-speed internet services, enabling them to benefit from the expanding range of available digital services.
- In terms of 5G connectivity, all Brazilian municipalities with at least 200,000 residents will have a 5G network by July 31, 2026, with at least one antenna. Brazil's 5G spectrum auction held in October 2021 raised about USD 8.5 billion. By 2035, introducing 5G in Brazil may have a USD 1.2 trillion economic impact and a USD 3 trillion productivity boost. Data center construction is increasing with network traffic, leading to demand for major physical security solutions.
- Owing to such factors, the demand for data centers from the telecom segment is constantly rising, mirrored by a rapid rise in the data center's physical security. The manufacturers of data centers are developing cutting-edge, affordable solutions that are scalable and secure to fulfill the rising demand from the telecom industries.
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Brazil to Hold Significant Growth
- Brazil's digital economy demonstrates the potential for continued growth over the medium and long term. The Brazilian government plays a significant role in developing local data center infrastructure. According to the government, the country's General Data Protection Act (LGPD) was implemented in August 2020. It is now expected to force many enterprises to migrate their cloud access to private networks and update their encryption services to extend user data protection.
- About 10-15% of data is created and processed outside a centralized data center or cloud, but the number is expected to cross 60-70% by 2025, a global trend that is also expected in Brazil. Such factors will lead to significant physical security solutions demand in terms of video surveillance and access control solutions.
- Microsoft, Amazon Web Services, and Google are Brazil's major cloud service providers. These cloud service providers will collocate their workloads with existing colocation operators and collaborate with new market entrants to provide cloud-based services.
- In Brazil, São Paulo is the most connected city, with a high availability of digital business and financial centers, making it a favorable location for facility development. The region is also witnessing a boost in investments in the market due to Brazil's data localization law, the Lei Geral de Proteção de Dados Pessoais (LGPD), which has implemented regulations to store the data generated within the country.
- According to the latest Security Industry Association’s (ABESE) survey, the Brazilian market for electronic security equipment comprises video surveillance at 39.6% and access control at 20.8%. With more than 26,000 companies, including data center companies, and an average market growth rate of 8% per year, businesses in the market expect to meet the demand. Such a scenario is expected to cater to the demand in the market.
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