DATA CENTERS

Costa Rica 2018 | TELECOMS & IT | B2B

Improved internet, cost-effective electricity, and consolidated government IT operations help Costa Rica's data centers focus on innovation and customer service.

Luis Rojas
LUIS ROJAS
CEO
ADN Datacenter
Ofelia Madriz
OFELIA MADRIZ
General Manager
Grupo Continex

What contributes to the growth of your business?

LUIS ROJAS Most of our customers are based in Costa Rica legally, though we support their regional operations. About 20% of our income comes from multinational companies. If we consider the companies that operate in multiple Latin American countries, which are known as multi-latinas, the figure is 68%. Multinational companies represent the segment with the most growth, and within that, financial services and transnational companies show potential. These might be banks, credit card companies, prepaid services for mobile companies, or call centers.

OFELIA MADRIZ We have businesses from different industries and different sizes contributing to growth. We can offer standardized solutions, and the size of companies does not matter, especially for standard solutions that have a small range of customization. In Costa Rica, there are many entrepreneurs that have initiatives. If we can help them jumpstart those initiatives with a platform at a low cost, this will help significantly to achieve their goals. We get into the core business of corporates and work with them as a back office partner. We are their advisor, technologically speaking, and seek to create and add value according to their needs and strategic plans are always focused on achieving our customers' goals. We are setting up solution packages that will help most businesses operating in Costa Rican, solutions that local and international companies can take advantage of as a monthly service alternative.

What are some of the challenges you face doing business in Costa Rica, and what could the government do to facilitate business?

LR We are located in a free trade zone, which has its privileges. We are fed from the same substation that feeds Intel and the airport. They are primary, not secondary substations. After 15 years here, we have experienced no more than six hours without power. We have a strategic location when it comes to power. We have 100% green electricity in Costa Rica; our power matrix is the best in the world. It plays a key role in making our electricity green across the entire country, though that also makes it expensive. Companies like ours have a small curve that reflects maximum demand, and we pay more for maximum demand than for the energy we actually use, which is why it is so expensive here. We need to change the laws; we are losing competitiveness under the current scheme. When it comes to government and our business, we are using large sums of money without a clear IT strategy for the government. ICE has a large data center and is finally using it. However, the Instituto Nacional de Seguros, the government insurance company; Banco Popular; and many other public organizations have built their own data centers, spending a lot of public resources on oversized, not-very-efficient infrastructure that all Costa Ricans end up funding through their taxes. It would be better to have just one or two data centers to create greater economies of scale and reduce waste. If the government solves the equation of efficiency in its institutions, and in its formula to charge electricity, Costa Rica could have greater leverage doing business and attracting new companies.

OM The technology infrastructure is not yet there for Costa Rica; for example, 1GB internet service is still expensive. This is something that the country still needs to work on. However, this needs more of an upgrade for the transport layer, including mobile data networks. At the end, if that is not modernized to allow the new technology to flow and grow as it is in North America and more developed countries, Costa Rica will be left behind and unable to take advantage of the new technology trends. Increased competition has forced telecoms to innovate and improve local infrastructure. In addition, the trend of acquiring new technology through managed services as opposed to buying the commodity allows companies to upgrade technology with lower or no impact on cash flows and no need for specialized nor dedicated resources on payroll. The managed service model is not a new concept, but it is gaining traction, especially in the public sector.