The American internet technology and data infrastructure firm predicts a successful 2024 in Latin America, with an investment of US$300 million between the data center business and the fiber optic business. The challenge ahead is to integrate both businesses into a new ecosystem of added value for companies.
Although the global outlook for short-term economic growth remains moderate - according to institutions such as the International Monetary Fund (IMF) and the World Bank (WB), which forecast growth below the average for the 2010s in almost 60% of the economies that encompass more than 80% of the world's population - the growth of global technology companies shows a different picture.
As per the spectacular growth figures from firms such as those reported by NVDIA for the second quarter, between 2024 and 2025 global spending on information technology (IT) is expected to reach US$ 5.06 trillion, an increase of 8% compared to the previous year, according to the latest forecasts from Gartner.
This surge could exceed US$8 trillion before the decade comes to an end, the analysis firm predicts.
In this select group is Cirion Technologies, or simply Cirion, a private technology company owned by the American company Stonepeak, which acquired the company when it was called Lumen. Since 2022, its global operations remain under the Lumen umbrella and in Latin America they have been transformed into Cirion.
The firm is one of the representatives of the so-called digital economy, which together today moves almost 15% of the world's GDP, with an offer based on internet infrastructure and data infrastructure, or data centers .
And their data indicates that, on the one hand, 250 million people on our continent do not have access to the Internet, while only 5% of data centers are in Latin America, so there is plenty of room for growth in both sectors.
"They are two businesses that are very complementary, but that have some different dynamics in how they are managed, in how they operate, in how the financing needs are met in order to develop infrastructure," Luis Piccolo, VP of sales for Argentina, Chile and Peru at Cirion, told AméricaEconomia .
This year, Cirion reorganized itself around these two business units, precisely to be able to focus on each of the two dynamics “and to be able to get the most out of them and be able to grow at the fastest possible pace and be able to invest in and develop both the data center and data infrastructure,” adds Piccolo.
The idea is to generate new investments to meet the demand that is seen in the market around both themes, with very important investment projects in progress: three new data centers , two already under construction; one in Lima, one in Santiago and another in the design phase for Rio de Janeiro, in the San Cristóbal area.
LATIN AMERICAN DATA CENTERS
The hook for Cirion, and other data infrastructure firms, is that the data center industry will enable the empowerment of artificial intelligence and, in turn, this will empower data centers , since AI requires the high data processing capacity that they provide, at the same time that AI is what orders all the management of a data center.
Hence, the demand for this type of facilities is increasing globally and for the Latin American region as well. In Chile alone, for example, the government has identified an investment of US$ 2.8 billion to build 28 of these centers.
“The region is growing a lot. It is estimated that the capacity of data centers will double or triple in the next five years, so the growth is truly exponential and we are going to accompany this growth. We are convinced that we have to continue investing to support the business in the region,” Gabriel del Campo, VP of Data Center for Cirion in Latin America, told AméricaEconomía .
The company has 18 data centres in this region, equivalent to 40 MW, and has already announced another three new generation data centres, in Chile, Peru and Brazil, for another 60 MW.
“We are taking the current ones to their maximum capacity and we are developing new ones when the current ones cannot grow any further. Now, if they are all interconnected in such a way that clients can continue using services from one to the other without any inconvenience,” adds del Campo.
What is new in Cirion's strategic vision is that they want to move towards the ecosystem concept, integrating data centers and network infrastructure.
"What we see is that the business community and companies increasingly need to transact and interconnect with each other because there is an ecosystem of relationships and businesses that exists in these areas," says Piccolo.
In this way, Cirion sees the data center not only as the place where a company can go to solve its computing and computing infrastructure problems, “but we are beginning to see it as a place where the company will solve its business interconnection needs. So, under that premise and vision (…) we are working on a plan to connect all the data centers in the region, both our own and those of third parties,” he says.
With this strategy, the best scenario for a data center is to have all carriers within its infrastructure. This way, it becomes a data center with easy access for the entire market,” Piccolo points out.
In this scenario, Chile stands out as a central axis of Cirion's strategy.
“It is a country that is a little ahead in terms of technology adoption and it is an entrepreneurial country, which offers a more stable and predictable framework in terms of politics, economy, which offers a certain security for these investments (…) Chile became a hub for data center infrastructure: large public clouds and many companies chose Chile to build their data centers, and so did we.”
SUBMARINE NETWORK AND CABLES
A little over a month ago, Cirion took a group of journalists to see its SAC submarine fiber optic cable in the port of Valparaiso. It was deployed in 2000 and is part of a network that spans 86,000 kilometers of submarine fiber cable throughout the region, from the United States, and with 18 cable landing stations, or CLS.
“In terms of network infrastructure, we have a large number of projects because the investment in the network is more permanent. The data center is an investment concentrated in one site. The network is more of an organic growth,” adds Piccolo.
Ciron's network includes a fiber optic ring that runs around all of South America, more than 50,000 kilometers of fiber plus a huge number of interconnection nodes. "It is a system that today functions as the nervous system of our society," said the regional executive. And capacity is constantly being added through the submarine cable system, connecting new cities, new routes, both to reach new markets and to give its network more security, with an important investment agenda.
“Today, communications infrastructure, data centers and the technologies that reside there have a huge impact on public life and the functioning of companies. A good data infrastructure today is part of the engine of the economy, and it is completed by an ecosystem of companies and startups that provide services.
PERUVIAN MARKET ON THE RISE
Cirion's goals in Peru, meanwhile, go beyond the data center being built in Macrópolis, south of Lima.
“What is happening in Peru today is very similar to what happened in Chile and in the rest of the countries in the region, and that is that many large corporate companies see a lot of value in our service offering,” says Gianni Hanawa, Country Director of Cirion Technologies in Peru.
And although 2023 was a bad year, with low GDP growth in Peru in particular, Cirion's performance yielded positive results. “This year we see a more optimistic economic environment, with more investment. The business climate has changed a lot,” says Hanawa, who has been with the firm for more than 20 years.
The executive points out that the corporate sector, while very sensitive to economic and social impacts, also has medium- to long-term plans. “So, everything that has to do with the implementation of technology projects is not instantaneous,” he points out.
For now, its fiber optic and internet business is once again on a growth curve that is relevant in a country that still has a large digital access gap. “We are the main internet service provider in the region. So, for us, this is very good news.”
The region's new data centres will also have a strong impact.
“Our plan in this regard is, basically, to host not only companies from the corporate sector, as the old data centers were designed, but also to serve large content companies that operate globally and want to approach Latin America. That is a fairly significant change with respect to how we have been doing business in the last 20 years,” explains the Peruvian executive.
Finally, Luis Piccolo highlighted the performance of Argentina, the third country he oversees.
This is a dynamic market, with strong and consistent industries and activity segments that adopt technology.
“It has a significant dynamic base, but there are economic and political ups and downs that sometimes make it more optimistic and the company makes stronger investment decisions,” says the executive, who is an Argentine national.
However, his company is a near-perfect example of how technology is running on a separate track.
"It has always been the case that, in times when the GDP is down or when there is a recession, we have done well because sometimes the type of project changes. In one case it is a project to develop and in another case it is a project to gain efficiency, so they enter into more aggressive plans to be more efficient, so I think we have to see how it is resolved now for where or at what moment the country's economy begins to reactivate a little," he says.
For now, its plans involve expanding the current data center and building a second-generation data center.
"But it is not that easy because the requirements for entering a data center are very specific in terms of availability, size of the power field, security," concludes Piccolo.
