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With 13 data centers, Mexico is the second-largest player in this sector in Latin America.

Due to its geographic location and powerful domestic economy, Mexico is becoming a strategic country for the establishment of data centers to support the growing digitalization process that companies are undergoing. In the wake of the pandemic, telecommuting has become an option for many employees, and demand for digital commerce and cloud services has skyrocketed.

All this revolution is possible thanks to data centers, and Mexico, with 13 of these facilities by mid-2022 according to Data Center Map data, is currently the second Latin American player in this sector behind Brazil.The number of real estate data centers in Mexico will see a double-digit increase between 2022 and 2027, according to data from JLL Mexico.

Microsoft, Oracle, IBM, Google, and Kio Networks are some of the main companies in this sector and are behind the new data center projects being developed. And, with plans to build 20 data centers, the state of Querétaro is on track to become the absolute king of this industry in Mexico in the coming years.

By the end of 2022, the portfolio of projects under development represents an investment of USD1.4 billion and will require 350MW of energy once in operation, according to data from Querétaro’s Secretariat of Sustainable Development.

With these figures, this state alone would have more than the 13 that Mexico has, but it would also be well above the rest of the regions in terms of the number of data centers. Mexico City currently has three, Querétaro three, and Guadalajara two.

The installation of data centers in Mexico is first seen as an opportunity due to its excellent geographic location.

“Mexico is a strategic market for us since it connects Europe, Asia, North America, and Latin America,” said Mario Chao, CEO at NTT Data. The country’s GDP size, population, and relations with North America are sufficiently attractive to make it an interesting market for the arrival of private companies that provide cloud services.

Sectors such as mining, banking and industry are intensive in the use of data engineering; however, it is also a strategic location on a global scale for exports to other regions. “Many European, Asian, and Latin American companies locate their production facilities in Mexico to export, which is why it is a strategic market for the NTT Data Group,” Chao said.

One of the main challenges facing the country is its energy generation capacity to power these infrastructures. For example, in Querétaro there is a current installed generation capacity of 1,200MW, but only 10 of the 20 data center projects will demand 350MW of energy, that is 29% of the current capacity.

Therefore, the technology companies are working with the government and the utility company Comisión Federal de Electricidad to ensure that these facilities will have the necessary power to operate 365 days a year, 24 hours a day.“

Mexico is part of a global strategy of evolution and incorporation of data centers at a corporate level from Oracle,” said Maribel Dos Santos, Managing Director & Senior VP at Oracle Mexico. The company has a development center in Guadalajara with 2,000 engineers developing new automated database solutions to improve decision-making processes.

This contributes to the creation of high-level trained jobs in Mexico, but also significantly increases the ability of local companies to access disruptive technologies.“Data is the new oil,” said Dos Santos. Data management is the fuel for the development of emerging technologies such as AI, machine learning, the internet of things and chatbots.

In this sense, Oracle is focused on materializing this revolution in Mexico through data analysis services that serve to improve decision making with the objective that companies improve their processes. “There is a strong trend toward analytics, and we currently have strong solutions,” Dos Santos said about its services to digitalize Mexican companies.

The need for entities to respond immediately to manage information is another factor that is fueling this growth. “One of the main challenges right now is the evolution of small businesses,” said Carlos Arguimbau, CEO at IENTC. Following the telecommunications reform promoted by the administration of former President Peña Nieto, many small companies came forward to digitalize their business.

This represents a great opportunity for telecommunications businesses, as this market has great growth potential because it is huge.In Mexico there are more than 4.1 million SMEs, which represent 99.8% of the total number of companies in the country, according to data from the statistics institute Inegi.

And all of them, in one way or another, demand digital solutions to improve the efficiency of their operations. “The Mexican telecoms sector has been extremely attractive for foreign investments, and the returns have proven to be excellent,” Arguimbau said.