The adoption of digital services such as online and streaming video games, virtual and augmented reality, and the metaverse, as well as the growing need for data storage and processing, has driven the demand for data centers in Mexico. According to information cited by Data Center Dynamics (DCD) from the Snapshot Report Mexico Data Center Market 2023- 2027, colocation and hyperscale data center industry is currently experiencing a significant growth phase, with an expected direct investment of over USD$7 billion by 2027. This includes an investment of USD$3.08 billion in ongoing construction and a planned or announced investment of USD$3.9 billion.
On the other hand, the Mexican Data Center Association (MEXDC) considers that in addition to the direct investment, indirect investments stemming from the hardware and software requirements for the provision of services in these types of centers should also be taken into account.
In the last five years, Mexico has emerged as an attractive destination for data center investments, especially in the co-location and cloud service provider sectors. Adriana Rivera, Executive Director of the Mexican Association of Data Centers (MEXDC), has identified three reasons that justify this development:
- Regulatory flexibility: It allows companies to build facilities tailored to the specific needs of each organization.
- Geography: Its proximity to the major telecommunications hubs in the United States, as well as the stable commercial relationship with the country, enhances the potential for companies to set up their data centers in Mexico.
- Lower construction costs in Mexico compared to the United States, enabling the attraction of hyperscale and colocation data centers.
Data Centers investment
The state of Querétaro has become a focal point for data center investments due to its geographical location, extensive internet connectivity, and electrical and infrastructure resources. A testament to this is Microsoft's announcement in early 2022 of plans to build a new data center in that location.
Another area of investment, also in the state of Querétaro, is cloud services. In this case, Google Cloud stated that it sees Mexico as a region where it will continue to invest and grow over the next three to four years.
MEXDC’s Executive Director believes that, while the location of data centers in the country is primarily concentrated in Mexico City, states including Guadalajara, Manzanillo, Monterrey, Nogales, and Toluca, along with Querétaro, are among those embarking on multimillion-dollar data center investments.
Balancing Growth and Sustainability
This level of growth has also brought increased attention to sustainability. Data centers are expected to face greater regulation as there is a growing concern about the carbon footprint and energy consumption of these critical facilities. According to the aforementioned DCD report, the growth in the country's data center industry for 2023-2027, entails an increase from 81MW to over 500MW for colocation and 1GW for hyperscale.
To address these challenges, companies like Vertiv are introducing innovative and eco-friendly data center infrastructure solutions, compared to traditional alternatives, such as:
- Liquid cooling solutions can remove more heat from servers and other equipment while using less energy, compared to traditional air cooling systems. Options include direct to chip liquid cooling, immersion liquid cooling, and door-to-door heat exchangers. Vertiv has produced a wide range of resources to optimize the potential of this system and scale data center cooling.
- Hydrogen fuel cells have the capability to generate carbon-free electricity with minimal environmental impact. Moreover, they are efficient and can be used as backup power in case of electricity outages, enabling the continuity of critical operations in data centers when used in a microgrid with other components.
- Lithium-ion batteries are a viable alternative source of stored energy for data centers due to their small footprint, longer runtime, longer life, and lower total cost of ownership (TCO) compared to valve-regulated lead-acid batteries (VRLA).
Vertiv seeks to promote the development and adoption of IT technologies in data centers, through a robust portfolio of products and services aligned with industry trends and customer needs. Learn more about the critical infrastructure solutions offered by Vertiv here.
