Brasil Technical Market Report 2014

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Brasil Technical Market Report 2014
Brasil Technical Market Report 2014

     June 13, 2014     The following Technical Report is based upon research to identify technical
                       market trends, specifically for US companies planning to create a data cen-
                       ter presence within Brasil. The report focuses on energy, telecommunica-
                       tons, collocation providers, and recent interviews with Brazilian Government
                       Officials.

     This Issue:

Brazilian Government
Incentives and
Programs for
Telecommunications
and Energy.

Brazil Data Center
Colocation Index

ESD MCF Group
Mobilizes for Brasil

                                   An ESD Publication

                                   Copyright 2014
Brasil Technical Market Report 2014
Brazilian Energy Report
  Brazil data center power supplies market size report by     Gilberto Hauller, Ministry of Energy Brasil, recently
  Frost & Sullivan says that the market will nearly double    spoke at the Data Center Dynamics Conference in
  to $460 million in 2017 from $240 million in 2012.          Brasila and announced that Brasil will soon be drilling
                                                              for oil of shore in a partnership with the Chinease. The
  About 40% of Brazil's electricity is produced by the na-
                                                              offshore oil drilling will produce about 30,000 barrels of
  tional Eletrobrás Systema. About 20% of electricity is
                                                              oil a day. This combined with the 77% hydro- power,
  from state-owned utilities, and the rest is from privately-
                                                              Brasil will be 100% self efficient in energy and not re-
  owned companies.
                                                              quire any imports from any other countries.

  In Brazil, there are 49 utilities with distribution conces- Brasil is 77% Hydropower making it the “greenest”
  sions and about 64% of Brazilian distribution assets are country in the world.
  controlled by private sector companies. The following
  table lists Brazil's most important distribution compa-
  nies:

Company             Controlling shareholder                  Concession area            Sales (GWh)        Sales (%)

Cemig               MG State Govt                            Minas Gerais               20,221             40%

Eletropaulo         AES Corp.                                São Paulo city             31,642             12.50%

CPFL                VBC Group                                São Paulo State outside    36,135             14.30%
                                                             São Paulo city

Copel               PR State Govt.                           Parana                     17,524             6.90%

Energias do Bra-    EDP                                      São Paulo, Rio Grande      15,863             6.30%
sil                                                          do Sul

Celesc              SC State Gvt                             Santa Catarina             15,157             6.00%

Light               EDF                                      Río de Janeiro City        19,139             7.60%

Equatorial          GP Investimentos/Pactual                 Maranhao                   2,793              1.10%
(Cemar)

Ampla (Cerj)        Enersis                                  Rio de Janeiro             6,832              2.70%

Others              Mostly private sector                                               87,594             34.60%

Brazil Total                                                                            252,900            100.00%
Energy Continued
    In 2011, gross production in Brazil was 532 billion kWh, including 428 TWh from hydro, 25 TWh from gas, 32 TWh
    from biomass and wastes, 15.7 TWh from nuclear, 12.5 TWh from coal, 14.8 TWh from oil, and 3.26 TWh from wind
    and solar. Net import was about 42 TWh. Per capita electricity consumption in Brazil has grown strongly from under
    1500 kWh/yr in 1990 to nearly 2700 kWh/yr in 2011. (updated March 2014)
http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/Brazil/

Hydro: Brazil has an untapped hydropower potential of 180,000 MW, including about 80,000 MW in protected
regions for which there are no development plans. The government expects to develop the rest by 2030. In Brazil, hy-
droelectricity supplies about 77% of total electricity demand. It is estimated that about 70% of the overall hydroelectricity
potential of the country, is still unexploited. The high dependence on hydro gives rise to some climatic vulnerability which
is driving policy to diminish dependence on it. A major drought in 2001 led to acute shortage of power. Despite this, in
February 2010 the government approved $9.3 billion investment in the new 11.2 GWe Belo Monte hydro scheme, which
will flood 500 sq km of the Amazon basin and supply about 11% of the country's electricity. However the scope for fur-
ther hydro-electric development is perceived to be limited.
http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/Brazil/

Nuclear: Brazil has two nuclear reactors generating 3% of its electricity, and a third under construction. Its first
commercial nuclear power reactor began operating in 1982. Four more large reactors are proposed to come on line in
the 2020s.

Operating Brazilian power reactors

                                                    Com-
                           Net ca-      First      mercial
  Reactor       Model
                           pacity      power       opera-
                                                     tion
 Angra 1        PWR       626 MWe       1982        1/1985
                            1270
 Angra 2        PWR                     2000       12/2000
                            MWe
                            1896
 Total (2)
                            MWe

  Brazilian Power Reactors under construction
                                                                            Construction        Commercial
      Reactor               Model                Gross capacity
                                                                               start             operation
 Angra 3                    PWR            1405 MWe (1270 MWe net)           June 2010           Dec 2015
 Northeast, Per-
                           PWRx4                 6000-6600 MWe                                     2020s
 nambuco
 Southeast, Mi-
                           PWRx4                 4000-6000 MWe                                     2020s
 nas Gerais
Top providers of Collocation
                                                           Top providers include:
  Companies in Brazil
                                                               Alog (an Equinix subsidiary)
Brazil continues to be the largest market for data cen-        HP
ters in Latin America and accounts for 40% of the re-          UOL Diveo
gion’s data center white space, according to the latest        Tivit
research from DCD Intelligence. The report estimates           Verizon Terremark.
that current data center power requirements for the re-
gion are now 2.6GW, an increase of 16.4% from 2012.
                                                           The real Data Center Map for Brazil
Regional data center power requirements are expected
to reach 3.85GW by 2016. Brazil accounts for 43% of        Until now, lists or databases of all co-location providers
data center power requirements but the highest growth      in Brazil has never been published. The most complete
is seen in Peru and Central America (22% respectively).    list published online only included about 20 Data Cen-
                                                           ters that are open to the public through co-location Pro-
Just under 21% of all racks in Latin America are out-
                                                           viders.
sourced to a colocation provider. Brazil accounts for a
high proportion of outsourced racks and almost 50% of      São Paulo: For most companies, São Paulo is the
all newly outsourced racks in the region are within this   only location to consider for hosting in Brazil. The Public
country. Growth is being hampered in some instances        Internet Exchange node in São Paulo handles as much
by a lack of suitable colocation facilities, however.      as 80% of all internet exchange traffic in the entire

             Provider                                                           Provider
     1       AllNet                                                 22          IDC19
     2       Alog (owned by Equinix)                                23          IFTnet
     3       America-Net                                            24          Inexo
     4       Amplitude Net                                          25          InfoLink
     5       Ananke                                                 26          Insidesign
     6       Ascenty                                                27          Intertelco
     7       BSA Brasil                                             28          Ipglobe
     8       Com4                                                   29          IW Telecom
     9       CommCorp                                               30          LocalNet
    10       Compos                                                 31          Locaweb
    11       Data Connection                                        32          Matrix
    12       Desktop                                                33          Netdigit
    13       Durand                                                 34          Sianet
    14       Ensite                                                 35          SIGMAnet
    15       Fastec                                                 36          Telbrax
    16       Flashnet Brasil                                        37          Tivit
    17       Fox Internet                                           38          Unotel
    18       G8 Networks                                            39          UOL Diveo
    19       Host Dime                                              40          Valenet
    20       Hostlocation                                           41          Verizon Terremark
    21       Hotlink
Rio de Janeiro: Rio de Janeiro is a favorite city for foreign and is well situated, being directly connected to
undersea cables from North America. However Rio de Janeiro’s public Internet Exchange node is responsible for less
than 5% of the national data volume.

             Provider                                                       Provider
       1     Alog (owned by Equinix)                             5          GVT
       2     Data Corpore                                        6          Hostlocation
       3     Embratel                                            7          Level 3
       4     Gigalink                                            8          Local Datacenter
                                                                 9          RNP

Other States in Brazil: São Paulo and Rio de Janeiro are responsible for about 85% of the public Internet Ex-
change data volume in Brazil so you have to have a special reason to consider an alternative location. Some of the
data centres located in other states keep dedicated links to the public Internet Exchange node in São Paulo.

             Provider          State                                 Provider              State
  1          Dial Host         Minas Gerais              30          Itake                 Rio Grande do Sul
  2          Itnet             Minas Gerais              31          Localnet              Rio Grande do Sul
  3          Naclick           Minas Gerais              32          Netsv                 Rio Grande do Sul
  4          Seven             Minas Gerais              33          Procempa              Rio Grande do Sul
  5          Valenet           Minas Gerais              34          Sebratel              Rio Grande do Sul
  6          Vespa Net         Minas Gerais              35          Stech                 Rio Grande do Sul
  7          WKVE              Minas Gerais              36          Sulnet                Rio Grande do Sul
  8          Alterna           Espírito Santo            37          Visao                 Rio Grande do Sul
  9          Intervip          Espírito Santo            38          Websul                Rio Grande do Sul
  10         Prodest           Espírito Santo            39          Concordia             Santa Catarina
  11         VipRede           Espírito Santo            40          Engeplus              Santa Catarina
  12         Voxbras           Espírito Santo            41          Gegnet                Santa Catarina
  13         Ib Telecom        Bahia                     42          Global Wave           Santa Catarina
  14         Lognet            Bahia                     43          Host Gold             Santa Catarina
             Soluções
  15         Maxwave           Bahia                     44          Visaopontonet         Santa Catarina
  16         Prodeb            Bahia                     45          Local Datacenter      Brasília
  17         Sim tv            Bahia                     46          NWI Telecom           Brasília
  18         Tascom            Bahia                     47          Ps5                   Brasília
  19         Viva Telecom      Bahia                     48          Yawl                  Brasília
  20         Web Foco          Bahia                     49          Central Onda          Paraná
  21         Wifi Bahia        Bahia                     50          Central Server        Paraná
  22         Adentro           Rio Grande do Sul         51          Data Cast             Paraná
  23         Alfainfnet        Rio Grande do Sul         52          Persis Telecom        Paraná
  24         Commcorp          Rio Grande do Sul         53          Itaol                 Goiás
  25         Datavag           Rio Grande do Sul         54          Wgo                   Goiás
  26         Defferrari        Rio Grande do Sul         55          Fortalnet             Ceará
  27         Flybyte           Rio Grande do Sul         56          Secrel                Ceará
  28         Guaiba Tele-      Rio Grande do Sul         57          Prodam                Manaus
             com
  29         Hifive            Rio Grande do Sul         58          V2net                 Rio Grande do
                                                         59          Vescnet               Pernambuco
Upfront investments in capacity upgrades
Long haul fiber information and
                                                             Ciena:
routing                                                       Ciena® Corporation (NASDAQ: CIEN), the network spe-
                                                              cialist, announced (Feb 2013) that its 100G solution, archi-
GlobeNet:                                                     tected with WaveLogic Coherent Optical Processors, has
                                                              been deployed by Telefonica Vivo. This is the first active
Roughly 75 percent of all network traffic emanating from      100G network in Brazil, which connects native 100GbE
Latin America enters the United States via Miami. Globally, channels to the DWDM system to provide unprecedented
MI3 has the sixth highest Internet capacity and is a key      speeds for outbound international traffic. The network in-
hub location for domestic and international traffic routes.   cludes 100G routes that connect the cities of São Paulo,
GlobeNet, a wholly owned subsidiary of Oi (formerly Brasil Rio de Janeiro and Praia Grande, Brazil. Ciena’s industry-
Telecom), has extended its low latency network into           leading 100G coherent solution will add significant band-
Equinix’s MI3 International Business Exchange (IBX) data width, scalability and reliability to Telefonica Vivo’s network
center in Boca Raton, Florida, opening up the fastest IP      infrastructure. With this regional and long-haul domestic
traffic route from the United States to Brazil. (May 2013)    network upgrade, Telefonica Vivo becomes the first net-
Network features                                              work operator in Brazil to deploy 100G, allowing the opera-
                                                              tor to extract more capacity out of existing fiber and sup-
Dual ring-protected subsea architecture, spanning more
                                                              port the delivery of high-bandwidth services and applica-
than 22,000 kilometers connecting North and South Amer-
                                                              tions.
ica 560Gbps of lit fiber from a total design capacity of more
than 7Tb/s GlobeNet owns and operates its own dedicated
Technical Support Centers (TSC’s) Located in the U.S.
and Brazil Exclusive direct routes with lowest latency
Subsea network availability measured in excess of 99.99%

                                                The Ministry of Telecommunications
                                                announced that the Government of
                                                Brasil will invest over $14B US in
                                                Telecommunications infrastructure
                                                and $4B US in data center infra-
                                                structure over the next two years.
Microsoft said it has invested US$15bn into its global data cen-
News in Brasil                                                         ter infrastructure.
According to Data Center Dynamics, June 9, 2014 Microsoft has
opened the doors to its Brazil South Azure data center in the          In its Q3 2014 results – ending March 31 - Microsoft announced
Sao Paulo state.                                                       Azure revenue had grown by 150%.

The Brazil South facility provides cloud services and also fea-        Azure is currently operating out of ten regions worldwide and is
tures Microsoft’s SQL Database as well as other data centers           available in 89 countries.
services.
                                                                       In March, Microsoft brought online its first data center to sup-
Microsoft said the Sao Paulo state data center will provide cus-       port the Azure cloud in mainland China in partnership with
tomers in the region with better performance through reduced           21Vianet.
latency.
                                                                       Most recently it helped the Ministry of Information Communi-
It will also allow them to have three copies of their data in the      cations Technology in Jordan to co-launch a national cloud
country through locally redundant storage.

Azure delivers a 99.95% compute SLA and enables users to run
solutions on the same cloud that powers Skype, Office 365, Bing
and Xbox.

 ESD Announces Ser-                              ESD Consulting                      ESD Design                       ESD Cx and Energy

                                                                                                                        Data Center
 vices to Support US                                Data Center                    Data Center Design
                                                                                        Services                       Commissioning
                                                Development Services
 Companies Building                               Power Fiber Threat                Master Planning                    Design Review
                                                  Technical Program                Schematic Design                    Commissioning
 Data Centers in Brasil                        Pro Forma Development              Design Development                     Training
                                                 M&A Infrastructure                     Bridging                          Energy
 ESD has created a myriad of services                Technology
 to support US clients migrating to Bra-
 sil. Services include ESD Consulting,
 ESD Design and ESD Energy –Cx services. While a majority of the services are provided by ESD directly, we have established
 business partners in Real Estate and Permitting to assist in local issues as well and cultural items.

 For More Information Contact:

 Paul E. Schlattman
                                                                                                  Environmental Systems Design, Inc
 Vice President, Mission Critical Facilities
                                                                                                  175 West Jackson, Suite 1400
 Principal, ESD Consulting
                                                                                                  Chicago, IL 60604
 Environmental Systems Design, Inc.
                                                                                                  312.372.1200
 11.312.456.2214
                                                                                                  www.esdglobal.com
 pschlattman@esdglobal.com
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