Latin America Data Center Storage Market - Industry Outlook & Forecast 2022-2027

MARKET OVERVIEW

The Latin America data center storage market is expected to reach $1.7 billion by 2027 from $1.1 billion in 2021, growing at a CAGR of 7.94% from 2022 to 2027. The Latin American data center storage market is driven by increasing digitalization, accelerated data center investments, especially by cloud service providers, and the adoption of advanced storage technology, like NVMe and software-defined storage. The data center storage market comprises several products, such as hard disk drives, solid-state drives, storage networking, and other infrastructure. This infrastructure is critical for effective data center storage. The Latin American data center market has grown strongly over the last five years. Especially after the outbreak of COVID-19, the demand for cloud and colocation services has skyrocketed in the market. In 2021, Brazil continued to dominate the data center storage space, whereas Mexico and Chile were upcoming destinations for storage spending in Latin America. The market is also dominated by expansion by global and local cloud service providers across the region. In addition, the demand is driven by government digitalization initiatives to support the growing consumption of online content by consumers in the region.

KEY HIGHLIGHTS

• Cloud service providers mainly contribute to Latin America's data center storage market. Expanding cloud presence through establishing multiple cloud regions across countries like Brazil, Mexico, Chile, Colombia, and Argentina will drive high-performance storage adoption in the market.
• In 2021, all-flash and hybrid storage systems contributed to around 65% of the market revenue, whereas traditional HDD-based systems dominated in terms of capacity.
• The contribution to the storage spending by enterprises across other countries is mostly restricted to on-premises deployment. The leading countries have witnessed strong growth in data center outsourcing services, especially colocation and managed services.
• Most investments will come from telecommunication service providers across several countries in Latin America as they continue to invest in improving connectivity and offering IT services to end-users.
• Edge data center deployments and establishing cloud regions at the edge by hyperscale operators will significantly boost the market growth.

SEGMENTAL ANALYSIS

• Storage architecture/topology, Network Attached Storage (NAS) systems dominate the market adoption, followed by Storage Area Networking (SAN) and Direct Attached Systems (DAS).
• Adopting technologies such as big data and IoT via digitalization initiatives by local enterprises will boost the procurement of all-flash and hybrid array systems.
• In Latin America, cloud, IT, and telecom segments are expected to witness the fastest growth in terms of data center storage, owing to factors such as the adoption of cloud by enterprises, the development of edge data centers due to 5G deployments, and initiatives such as the pay-as-you-go model for cloud storage.

KEY MARKET TRENDS

Increasing Innovation in Data Center Storage

• Innovations in storage media expected to impact the Latin American storage market include adopting DNA and holographic storage.
• Tape storage is also returning to the storage market, with companies such as Quantum (LTO-9, LTO-8, and LTO-7 tape drives) and Hewlett Packard Enterprise (LTO Ultrium) offering tape storage in the market.

ADOPTION OF SOFTWARE-DEFINED STORAGE

• Software-defined storage is expected to increasingly be used in data centers over the next few years, mainly due to over 80% of the data generated is unstructured, which makes it more difficult to store in a traditional storage system.
• Though the use cases of software-defined storage are currently minimal in the Latin American market, the adoption will grow, along with hyper-converged platforms/rack-level architecture being adopted, even in on-premise deployments in Latin America.

GEOGRAPHICAL ANALYSIS

• Brazil contributed around 40% to storage spending in 2021. Mexico and Chile are expected to flourish during 2022-2023, following Colombia and Argentina during 2024-2026.
• Around 25% of large enterprises in Brazil have adopted AI and machine learning technologies, contributing to the strong growth of high-performance storage systems in the market.
• In other Latin American countries, currently, there is a meager presence of third-party data center services, which is expected to grow via investments by technological firms and cloud service providers, further contributing to the storage market growth.

VENDOR ANALYSIS

• In Latin America, the data center storage market is very competitive, especially with the advent of ODM infrastructure procured by hyperscale operators for their storage needs.
• The major procurement of storage infrastructure in Latin America is being carried out by cloud service providers involved in rapid expansions across the region with additional cloud regions. These operators are involved in procuring storage systems, ranging from low to high-performance storage solutions.
• Storage infrastructure vendors such as Huawei, Fujitsu, IBM, HPE, NetApp, Pure Storage, and Dell Technologies have a strong presence in the region, either directly or through reseller/distribution partners.