Changing the way that the cloud connects Latin America

Changing the way that the cloud connects Latin America

Layer 9 is breaking new ground, utilising the immense untapped potential of the LATAM market and fostering the development of the region’s tech talent

In the five largest regions of Latin America – Brazil, Argentina, Chile, Mexico and Columbia – the population is around 640 million people. To put this into perspective, there are around 330 million people living in the United States. 

The amount of people that are using data in South America is growing at a compound rate of almost 25% per year. Furthermore, coupled with the fact that the average income in the region is growing, the proportion of regional industries that are pivoting to tech is rising along with it. In fact, in Mexico, nearly two thirds of its GDP is specific to high-technology products.

In terms of personal users of data, then, the South American smartphone penetration rate is currently set at around 68% and growing rapidly. 

“For example, 10 years ago, an average LATAM household family of four would download about seven gigabytes of data per month. But today, that same family is downloading 77 gigabytes of data. In fact, that number doubled to 77 from 38 in just the last three years,” explains Michael Ortiz, the CEO and Co-Founder of Layer 9. 

Despite this, there are 223 million Latin residents who still don't have access to the internet. 

When you take these figures into account, it’s apparent that there is a major opportunity present in the LATAM market – one that, from Layer 9’s perspective, has such exceptional potential that has gone largely unnoticed. 

Until now, that is. 

The untapped potential of the LATAM data market

Layer 9 is a data centre provider that specialises in prefabricated, modular and hyperscale solutions. It operates in the LATAM market, bringing hyperscale connectivity to regions that have previously been dramatically underserved by these technologies.

Joseph Ryan, Layer 9’s Chief Development Officer and Co-Founder , explains how the LATAM market presents a number of growth challenges, and how the differences between expanding in America versus expanding in the LATAM market have meant that previous companies have decided not to invest in this region.

“The way in which we build in the US and other areas is that you build the site, and they will come. You’ll be able to get all the utilities and the fibre there, in some capacity, and within a certain reasonable timeframe. 

“But what we found in Mexico and Latin America is that there are a lot more challenges, because some of these cities aren't as developed infrastructure-wise, or have challenges in distributing power or connectivity,” Ryan explained.  

“Hyperscale was practically nonexistent within Latin America just five years ago,” Alejandro Cantu Sepulveda, the Chief Operations Officer and Co- Founder of Layer 9, added, explaining the status of the market when Layer 9 first established itself in the region. 

“Working the Latin America market, and being of Mexican descent, gave me a street-level perspective of what was happening within that market. And there were certainly data centre projects happening, but the scale of those projects was very, very small – varying from five to ten megawatt sites – and understanding why that was happening was a big challenge for Michael and I.”

“We saw the opportunity to solve that hyper-scaled infrastructure dilemma within Mexico, and to cater to cloud service providers who innately prefer to not always own the brick and mortar. But data centre companies in Mexico and Latin America who catered to retail clients didn't understand the hyperscale world. So, in their business plans, you saw growth of, again, three megawatts, four megawatt data centres,” Sepulveda explained. 

So, in contrast to the other operators in this market, Layer 9 enables hyperscalers to continue their growth into Mexico and LATAM while maintaining the type of footprint and delivery that they've been accustomed to elsewhere in the world. 

Giving something back to the LATAM market

Then, alongside the growth opportunity that Layer 9 unlocks for its hyperscale clients, there is also the company’s work to foster the region’s immense tech sector talent. 

For Sepulveda, in particular, the company’s decision to invest in Mexico and the LATAM enabled him to help transform the region's reputation in the global digital and data centre industries. 

“I think it's time to give back to Mexico what Mexico has given to us,” Sepulveda states.

“Mexico has great potential in Latin America, and it hasn’t been exploited properly. Technical job creation, stable investment technology, upgrading school programmes to be able to attract new talent in our trades to do things better – that creates an ecosystem of people and talent that’s sustainable and will replicate by itself.

“I tend to see it as a domino effect. The main question is, who's going to push that first domino? And we will do that. We want to create that ecosystem that creates that domino effect,” Sepulveda explains.

For Sepulveda, not only does this fuel an invaluable talent development opportunity in the region, but it also drives digital transformation across the LATAM, benefitting both individuals and organisations alike.  

“Sometimes, people perceive Latin American countries as what they see on TV, and when they get to explore those markets, they're deeply surprised by the infrastructure, the availability of connectivity and the talent,” Sepulveda comments. 

“It's an underserved market, and people should better understand it. Then, when they do, they'll see the great opportunity that we have in those markets.”

And Layer 9’s unique approach to investing in this market opportunity has enabled the company to expand rapidly, and create a sustainable, immensely competitive growth model. “Some people saw Layer 9 as a project, but Layer 9 is a platform,” Sepulveda states. 

“Now, our model is kind of breaking the rules. So we're dropping flags where we can find the qualities to build a data centre, which is power and connectivity. The same as we did in Mexico. We opened up the ring, and we figured out that there was more opportunity.”

“Based on direct feedback from the CSPs, we have begun the site selection process on several new hyperscale campus sites, all within Latin America. Our goal is simple - to become the ‘easy button’ for the cloud, and to expand our platform across three to five regional zones throughout LATAM,” adds Ortiz.

Building a collaborative multinational company culture

Alongside the prime market positioning and rapid digital investment in the region, Layer 9 names its company culture as another critical factor in its success. The diversity of team viewpoints, company-wide mentoring, and the shared mission that drives everyone has allowed Layer 9 to build its characteristic team dynamic. 

“What I love about our team is that we come from diverse backgrounds. Some of us were cut from the cloth in this business; some of us fell into it, like myself; some of us came from the bottom up of the business, on the equipment resale side. And some of us came from the top down, being the banker or asset manager financing that equipment. And then everything in between,” Ortiz explains. “This company is only two and a half years old, and yet we have some of the most innovative think-tank sessions I've ever had in my entire career.”

This company culture, as Ryan describes it, takes an “all hands on deck”, fully collaborative mindset.  “It's a testament to the team, what we've done and how we go about doing it. We have different styles, but what’s brought us together is the common goal and the way that we achieve it.”

And, for Layer 9, this sense of a shared goal has actually proven invaluable to their internal talent retention, a challenge that data centre companies across the world are facing. 

“In years past, companies have lost their individual touch to inspire their employees, to keep on growing and to look for new opportunities. People that are joining our company believe in the project and believe in what we're doing right now,” Sepulveda enthuses. 

Fostering collaboration amongst all talent across the company’s markets, mentorship and long-term partnerships help ensure that these growth foundations are strong and sustainable. 

“In areas that are regional, we have a peering initiative, which is mentoring. We’re also bringing in groups, partners, employees and consultants that we know have the capabilities to collaborate with us on the first project, the second project, and so on, rather than being disconnected from our operations. And it’s unusual to have that type of involvement at the field level, but we think so much about that,” Ryan outlines, before expanding on this. 

“It’s also about going into these areas that may have some experience, but not at that large-scale hyperscale level. They have commercial construction capabilities, but not really that specific technical nuance. So what we're doing is building that experience capable of fostering such growth regionally, but also culturally – inject the way we work into the region, but not force it.” 

By nature, this is markedly different from the approach taken in the US and European markets; for Layer 9, this is critical, as it helps them to navigate the barriers to growth in the region, which their competitors haven’t successfully penetrated.

“To be able to give them the support that they need to grow – and in turn for us to grow – through understanding this culture is a hugely symbiotic relationship. That's what our mentors’ job is to do, and that's really our goal: it's mentoring, it's partnering, it's collaboration, it's immersing ourselves in learning without being the bull in the China shop,” Ryan explains. 

“I think what makes our team unique is that we've gone at it differently than the others. We have a team that's tremendously cohesive, tremendously collaborative, but that immerses itself into the local market, the local culture, and understands those regions prior to purchasing land. This means that land purchase is fruitful for both us and our customers in the future.”

“It really drives our vision. We all have a common goal and a common vision of how we want to collaborate, as well as how we want to partner, both with ourselves and with our local partners, regions and government.”


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