Data Dreams

Empowering Mexico's digital frontier.

Mexico stands at the precipice of a digital revolution, poised to emerge as a leading player in the data centre industry. However, despite its immense potential, the nation grapples with significant barriers that impede its progress towards becoming a dominant force in Latin America’s data landscape. 

At the heart of Mexico’s struggle lies its energy infrastructure, which remains a glaring obstacle to its ambitions. The country’s heavy reliance on non-renewable energy sources, accounting for approximately 70% of its energy output, poses a considerable environmental challenge.

This reliance not only hampers Mexico’s ability to meet the growing demand for cloud services but also contributes to environmental degradation. “Two issues are key to the continued growth in the number of installations: energy and water,” a senior IT consultant explained, “clearly both are a challenge. On the one hand the availability of energy is quite uneven and on the other, we are living in a season of water scarcity, which is vital for data centre cooling systems.” 

“Two issues are key to the continued growth in the number of installations: energy and water. clearly both are a challenge.”

Senior IT consultant, Mexico

To fully unlock its potential, Mexico must address critical issues within its strategy. These include bureaucratic hurdles, delays in construction permits and a lack of fiscal incentives for clean energy development. “At the moment, getting the data centres themselves involved in self-generation projects using renewable energy is not so achievable due to the limitations imposed by the CFE,” confirmed an IT businesswoman. “Another goal to having more centres is to ensure that they operate under the most rigorous sustainability standards, focusing on energy efficiency and emissions reduction.” 

The excessive bureaucracy and slow permit processes delay the construction of data centres, hindering the industry’s growth. The businesswoman continued, “the federal government, although it is known to be looking to improve infrastructure, does not have a clear project aimed specifically at adapting the existing one to the needs of the IT industry.” Additionally, the absence of fiscal incentives discourages investment in clean energy solutions, exacerbating Mexico’s reliance on dirty energy sources. 

The urgency of the situation is underscored by projections showing a substantial surge in global demand for data centres by 2027. By 2030, when Mexico aims to double its data quantity, demand will far exceed current forecasts. “The government has been rather lukewarm on investments to ensure greater availability of data centres,” the senior IT consultant explained, “we are optimistic about the next government as Sheinbaum has made technology a priority issue.”  

“The government has been rather lukewarm on investments…we are optimistic about the next government as Sheinbaum has made technology a priority issue.”

Senior IT consultant, Mexico

This exponential growth creates opportunities for other regional contenders, “apart from Querétaro and Nuevo León, the most suitable regions are Guadalajara, Guanajuato and Manzanillo, which are expected to receive the most investment for the construction of data centres,” according to an IT infrastructure specialist.

The businesswoman agreed adding, “the Bajío region is also attracting interest from data centre colocations, especially Guanajuato and San Luis Potosí.” She furthered,large companies such as Google Cloud, Amazon Web Services and even Microsoft are already hosting or looking to have centres in the country.” São Paulo, Brazil, is emerging as a formidable frontrunner as well as cities like Santiago, Chile and Costa Rica also present compelling alternatives, boasting clean energy matrices and stable political environments. 

In response to these challenges, the private sector has assumed a leading role in propelling Mexico’s data centre industry forward. The Mexican Association of Data Centres (“MEXDC”), representing over 65 firms, spearheads advocacy efforts and shapes policies for sector development. “These are not investments that can be seen in the short term, so far, a good bet is to work hand in hand with local governments,” remarked the IT specialist. This collaboration between industry players and government agencies is essential for overcoming regulatory barriers and “to invest in stations and distribution centres, to strengthen the system,” fostering an environment conducive to industry growth. 

On the public front, authorities in Queretaro State have earmarked nearly USD 300 million to fortify the region’s energy infrastructure over the next decade, signalling a proactive approach to overcoming barriers. Queretaro, with its minimal risk of natural disasters, robust optic fibre connectivity and unwavering government support, shines as a beacon of promise in the data landscape.

Meanwhile, Nuevo León capitalises on its proximity to the United States and Canada, leveraging nearshoring policies to attract significant investment from tech giants like Microsoft and Tesla. “We should already be touching base with the presidential candidates to explore this flexibility, not only because IT is continually expanding in the country, but also because nearshoring will impose a greater need for more data centres,” confirmed the IT sector businesswoman. 

As Mexico navigates the complexities of its data centre industry, “the actors who are pushing for the sector to flourish are grouped in the Mexican Association of Data Centres and are the ones who are setting the guidelines,” noted the IT specialist. By addressing its energy infrastructure shortcomings, streamlining bureaucratic processes and incentivising clean energy development, Mexico can position itself as a powerhouse in Latin America’s data revolution.

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