Fueled by the rollout of private and public 5G and by the expansion of connectivity and IoT projects within the scope of industry 4.0, edge computing initiatives are starting to get off the ground in Latin America, with expectations to intensify in the coming years.
Edge architecture refers to the decentralization of data storage and data processing into several, smaller mini datacenter structures, taking content at (or close to) the physical location of the user or data source.
With closer processing, end-users benefit from faster connection, lower latency, and more stable services, as well as better transmission, making such architectures increasingly relevant for real-time, data-heavy industrial applications.
Although market projections are not precise – as many LatAm projects are in initial planning or pilot phases – some consultancies are looking ahead.
Grand View Research forecasts that the Latin American market for edge computing could be worth US$43.4bn in the next five years.
The more data being generated and consumed as a result of digitization and the introduction of new applications, the more organizations will require both increased edge and cloud computing capacity.
So, companies from carriers to internet groups and infrastructure providers, are either implementing these structures or working on pilots and/or studies regarding their applicability.
A 2020 study by IDC predicted that by 2023 more than 30% of all the enterprise IT data infrastructure deployed in Latin America will be edge, versus traditional corporate datacenters.
According to research firm Gartner, 50% of all global data will be processed outside datacenters by 2023 and 70% by 2025.
A 2021 global survey by mission-critical and power management solutions provider Vertiv of 156 industry professionals – 35 of which were from Latin America – found that LatAm had one of the highest percentages of IT still on premises, at 50%, and one of the smallest percentages of participants deploying or planning new edge sites (30%).
However, LatAm companies expect, on average, the rate of IT infra on the edge to grow to 30% in 2026, from 21% in 2021 – the biggest shift to the edge across all the geographies assessed by Vertiv.
According to the same study, reducing manufacturing equipment downtime and supply chain optimization were the most popular use cases driving edge investments globally.
Predictive maintenance was the leading use case cited by participants (39%) followed by condition-based maintenance.
Some 42% of sites currently in place consisted of more than four IT equipment racks and had power requirements above 20kW.
The survey covered key industries including banking and finance (8%), colocation/hosting/cloud (7%), engineering and construction (9%), education (5%), manufacturing (17%), professional services (11%), retail (8%), telecommunications (12%) and transportation (7%).
INITIATIVES UNDERWAY
Although the concept of edge data architectures is not new, it has become a trend in recent times as streaming, gaming and industry 4.0 soared, pushing data and IT consumption to new heights.
BNamericas has been reporting on the growing interest in edge investments by players in the LatAm ICT industry for at least the past two years.
Here we provide an overview of some of these initiatives, most of which are taking place in LatAm’s largest and most advanced data market, namely Brazil.
From América Móvil to AWS
América Móvil’s Brazilian B2B company Embratel was planning to have 12 edge datacenters deployed in the country by the end of 2021. In the latest update, Embratel said three of these were already in operation in São Paulo, Brasília and Curitiba.
The others are planned for Belo Horizonte, Rio de Janeiro, Vitória, Cuiabá, Manaus, Belém, Porto Alegre, Fortaleza and Salvador.
BNamericas reached out to the company about these rollouts but did not receive a reply by the publication of this article.
Among the main cloud providers, US behemoth AWS aims to open new edge-related computing zones, called AWS Local Zones, in six Latin American cities by end-2023. One of them already went live in Rio.
The other structures are due for the coming months in Bogotá, Buenos Aires, Lima, Querétaro and Santiago and are part of over 30 such new sites to deployed globally by the company.
AWS has three such sites in place in São Paulo, Rio de Janeiro and Fortaleza, as well as 17 Local Zones in the US.
AWS Local Zones are a type of infrastructure that extends AWS cloud regions (datacenter clusters) to put computing, storage, database and other services close to individual customers, and industrial and IT centers.
This, according to the company, allows customers to deploy applications that require latency of less than 10 milliseconds closer to end-users or local datacenters.
Another AWS edge-related architecture is the so-called Outposts. These enable customers to run compute, storage, database and other services in on-premises environments while connecting to AWS’s wide range of cloud services, according to the company.
Telefónica is one of the major telcos operating in Latin America tapping Outposts, and is planning to use them for the infrastructure of its cloud-native 5G network core, starting in Brazil.
The initiative is expected to optimize Telefónica’s offer of 5G services to Brazilian customers, according to the telco.
AWS is also in talks with LatAm companies, including miners, to deploy edge computing in their private networks.
Also in Brazil, Edge UOL, a recently created unit of Brazilian internet group UOL, announced a team-up with AWS and DigitalBridge’s Scala Data Centers to explore edge computing.
Under the team-up, Edge UOL will act as a managed services provider based on the AWS Outposts on-premise infra servers installed in Scala’s edge datacenters.
TIM and Ava
Another Brazilian carrier, TIM, intends to deploy over 60 small edge datacenters across the country by the end of 2023, to process certain operations and bring content closer to users. At present, the carrier has over 40 edge datacenters deployed.
Previously, TIM had plans to have 55 datacenter edge (DCE) points in 51 cities by the end of 2025.
TIM’s investment in edge datacenters runs in parallel to its divestments in traditional IT datacenters.
The telco plans to sell all of the latter as it outsources such infra to the cloud. Last month, data from antitrust regulator Cade showed that TIM had entered into an agreement to sell a Porto Alegre datacenter to Piemonte’s Elea Digital.
With the edge as its main business proposition, Elea relies on Vertiv to deliver edge datacenter services in Brazil. Under an alliance signed by the parties, Vertiv will provide operation and maintenance services for Elea Digital’s six datacenters, located in Brasília (two), Rio de Janeiro, Curitiba, Porto Alegre and São Paulo.
Meanwhile, corporate and wholesale telecoms provider Ava Telecom has announced plans to deploy a network of edge datacenters in São Paulo state, where its operations for internet service providers (ISPs) are concentrated.
The project, announced last year, relies on a partnership with Multiway, Leveros Solar and BlumaTech. Multiway is the manufacturer of the racks and servers, while Leveros will supply photovoltaic panels.
Ava also said it “continuously invests in building DWDM (dense wavelength division multiplexing) networks” to add more transmission capacity to its optical mesh, with more than 800km of optical networks to be lit (activated) in São Paulo state.
Other use cases
Elsewhere in Latin America, Telecom Argentina has been revealing its cloud and edge intentions.
“We are beginning to deploy processing together with our partners, both in our own networks and in our own cloud, as well as working with partners so that latency is very low,” Telecom Argentina B2B director Leonardo Coca told BNamericas.
“The first thing we have to do is have processing in the country, then start installing [processing hardware], which is not yet working in network cells, but exists in the provinces” at the network edge, he added.
The leading Argentine telco operates five datacenters, with the biggest one in Pacheco serving the main hyperscalers, and has alliances for the clouds of Microsoft, AWS, Google, IBM and Huawei.
Founded in 2009 and based in the US, edge-focused EdgeConneX claims to have built 40 datacenters in North America, Europe and South America since 2013.
In the region, EdgeConneX has two South American datacenters, in Argentina and Chile.
Located in Pilar, in Greater Buenos Aires, EdgeConneX’s EDCBUE01 site is carrier-neutral, designed with 10.5MW in capacity with 3.5MW in initial use, and connected to Metrotel, Cirion, Silica Networks, IPLAN, Claro, Internexa and Telecom Argentina networks.
Meanwhile, its Chilean SCL01 facility, located 21km from downtown Santiago, has 1,393m2 of data hall and total planned space of 2,600m2, and a design for 3.5MW in capacity.
EdgeConneX has the Oracle Cloud FastConnect cloud available locally in the Santiago facility, enabling private, dedicated network links to the Oracle cloud platform from the edge datacenter, according to the company.
“We work with our service provider customers to define, build, and deliver carrier-neutral datacenter capacity that brings the edge to our customers and our customers to the edge,” the company reports on its website.
Caribbean
A Schneider Electric-sponsored IDC study highlights the Caribbean as a region particularly prone to edge computing architectures.
Specifically, to prefabricated and modular datacenters, as a solution for complex IT infrastructure needs in its constrained island environments.
“In Latin America, even though this technology is still in the deployment stage, it is estimated that 70% of the investment in edge computing is allocated to hardware and connectivity,” said the study.
“In the Caribbean, this investment will have more emphasis on hardware, since, in this region in particular, the disparity in terms of connectivity, energy and its geographical peculiarities imply more challenges for the presence of datacenters, making edge computing make more sense.”
However, according to Vertiv, for edge sites, both physical and data security must be considered. By distributing IT resources, edge computing complicates data security management, it said.
“However, in some use cases, such as healthcare, edge sites can reduce the vulnerability of data by keeping it close to the point of generation and minimizing exposure to threats created by transmitting data to the cloud,” Vertiv said.
Hardware players
One of the leading IT service integrators operating in Latin America, Logicalis recently announced a partnership with Dell for the offer of data processing infrastructure for operators that are structuring 5G networks.
The alliance, through which Logicalis integrates Dell equipment, targets the demand for edge computing environments.
“Dell is a key player in our technology offering for 5G networks,” the CTO of Logicalis for Latin America, Kan Wakabayashi, said in a statement.
Last year, Dell datacenter solutions sales VP Christiano Lucena told a press conference that 53% of companies planned to implement edge computing in the next 12 months.
A major competitor to Dell, IBM, mostly through its Red Hat subsidiary, is among the strongest pushers of edge in Latin America.
IBM Brazil CEO Marcelo Braga recently told BNamericas that the company has “various engagements” with players from verticals such as banking, insurance, industry and telecoms for edge, although he did not elaborate on contracts or ongoing projects.
At a June press conference in Buenos Aires, Adrián Cambareri, RHEL (Red Hat Enterprise Lunix) operating systems manager, said in response to a question from BNamericas that companies have adopted hybrid cloud and are using more than one public cloud operator, but that most of them are still in an edge computing evaluation phase.
“The edge is emerging globally. Latin America is always a little behind, but what we saw with the pandemic is that the adoption cycles accelerated,” he said.
“5G is going to enable the possibility of bringing computing closer to where data is produced,” Alejandro Dirgan, part of Red Hat’s group of hybrid cloud specialists, said.
The company will join the IBM partner ecosystem and use IBM Cloud for Telecommunications, a solution that enables services to be deployed anywhere: in the cloud, on premises or on edge technology.
IBM Cloud for Telecommunications uses a container-based architecture that enables operators, enterprises and customers to integrate, automate and orchestrate the execution of network and IT workloads in any environment.
“For customers to get our best technology with the greatest scale and flexibility upfront, we have built the IBM Cloud for Telecommunications using Red Hat OpenShift, and this strategy positions partners as the engine to drive a multitude of possibilities for customers,” Patricio Espinosa, CEO of IBM Colombia, told BNamericas.
Cirion
In 2021, the number of Latin American customers who acquired Cirion’s (formerly Lumen Latin America) edge computing services doubled over the previous year, according to the company.
“We notice a growing interest in different industries, particularly in those where latency is critical, such as entertainment, content creation, e-commerce, and public cloud service providers,” said Leonardo Barbero, the company’s then Latin America senior VP of products and access management.
Throughout 2021, Cirion said internet nodes were added to its network in 15 Latin American cities to offer more services to more users.
The company also said it deployed 878km of optical fiber, added 10Tb/s of capacity to its terrestrial optical networks, and doubled the peering capacity, allowing more than 17Tb/s exchanges with other providers.
In addition, it has also expanded its content distribution network, which is also part of the edge ecosystem.
“There’s a lot of demand. Not only operators or hyperscalers buy from us, but also corporate clients who are starting to buy edge,” Facundo Castro, CEO of Cirion, told BNamericas in August.
“It’s something that will grow a lot, with customers requiring more and more [infrastructure] to store, process and decide on information faster. We believe that we’re very well positioned with datacenters and the many nodes of the fiber network, which, by the way, can also be pooled into edge nodes.”