As increasing numbers of businesses and government entities move towards storing their data in the cloud, demand for data centres is rising around the world. In Trinidad and Tobago a preference to keep sensitive data inside territorial borders has led to a number of new projects. However, unless data providers can convince companies of the benefits of transferring their data to the cloud, a period of oversupply could be ahead.

Global Trend

Data storage requires physical infrastructure. Data centres, often run by large companies or governments, provide that service in secure buildings with multiple power sources and cooling systems. As well as being secure against earthquakes and power outages, data centres offer regular backing up of data and disaster recovery strategies to minimise the risk of data losses. Demand for data centres has also been boosted by the growth in cloud computing, whereby data and applications are stored at a remote location rather than on the hard drives of PCs and laptops.

According to a January 2015 report by research firm Research and Markets, the data centre construction market worldwide is set to grow at an annual rate of 9.3% per year between 2014 and 2019, from $14.59bn to $22.73bn. Data centres can be built anywhere with a good internet connection and reliable power supply. They also have low labour costs and many of the major IT companies, including Facebook and Apple, choose to locate their facilities within the US, based on climatic factors and tax regimes. Apart from cheap energy, T&T has little comparative advantage, but the desire to keep data within territorial borders has created new demand for data centres in the country.

Patriot Games

In recent years there has been increased concern from companies and governments that data storage in the US might be subject to government snooping under that country’s 2002 Patriot Act, which expanded the discovery mechanisms law enforcement can use to access third-party data. European data centres, in particular, have seized on the opportunity to market their cloud services as being beyond the reach of the Patriot Act. In T&T the government has a policy of keeping all data in-country, although applications can be hosted on the cloud outside its borders. Local companies also have a preference for keeping their data within the country’s borders. “Many of the multinationals present in T&T store and access information on remote data centres, but for local companies privacy and security is an issue, so they prefer data residency,” Simon Aqui, general manager of IBM in T&T, told OBG. “This creates demand for local data centres and we have seen players moving into that space.”

Reality Bytes

Many large companies choose to maintain their own data centres. The first major independent data centre in T&T was opened by Fujitsu – the world’s fourth largest provider of data storage services – in the town of Barataria in 2009. Since then Fujitsu has successfully captured the market for government and private sector data storage. However, the firm’s dominance could soon be challenged by established players and newcomers. In late 2015 Caribbean telecoms operator Digicel announced it was close to completing a 200-rack data centre that would make it the largest in T&T. The centre will provide full cloud and managed services, offering clients off-site data storage, allowing them to back up on the islands or in neighbouring Caribbean countries.

National telecoms company Telecommunications Services of T&T (TSTT) has also opened up its internal data centre for third-party use. “We started our data centre a number of years ago for internal use. Now we are in the nascent stages of marketing it for external use,” Rakesh Goswami, executive vice-president for strategic alliance, enterprise and Tobago operations for TSTT, told OBG. “It is an important part of our five-year plan. We have hosted services offering our own cloud, but we are also looking to form joint ventures with companies to provide additional cloud applications.”

TSTT also won a request for proposals in partnership with the Eco Industrial Development Company of Tobago for a data centre in Tobago to provide local governments with their own data hosting, as well as offering T&T firms the option of backing-up data in a second centre within national territory.

In February 2015 Caribbean IXP announced that it was building a Tier-3 data centre hosting facility in the Tamana InTech Park. The $40m project will provide hosting, cloud and security services in a quake-proof facility. Girish Pathak, the firm’s CEO, describes the facility as a “data centre hotel”, as the structure will be subdivided to provide individual spaces to clients. The name of the US investor behind the deal is as yet undisclosed.


Reliability and security are key factors in data centre competition. Data centres are divided into tiers, based on the installed redundancy, the number of uplinks and the available power options. The new data centre projects, like the existing Fujitsu facility, are Tier-3 data centres – meaning they have multiple power and cooling systems, although only one is active at a time, allowing for ongoing maintenance and an availability rate of 99.982%. The only higher level is Tier-4, where all components are fault tolerant and dual powered, providing an availability rate of 99.995%.

In July 2014 TSTT signed a deal with Curaçao Technology Exchange (CTEX) to provide cloud solutions to Caribbean clients from CTEX’s Tier-4 data centre in Curaçao. In terms of security, the two key certifications for data centres are ISO 27001 – which specifies requirements for operating and monitoring data management systems – and SOC 2 – which provides assurance on security controls, availability, processing integrity and confidentiality. TSTT and Fujitsu have received both certifications in the last two years.

To Market

With the infrastructure being put in place, the next challenge for data companies is to convince local firms and government institutions that their operations could be run more efficiently through the use of cloud services. With no data centres on island, IBM’s challenge is to convince companies that their data is secure in the firm’s Brazilian and Canadian data centres. Meanwhile, TSTT may have an advantage in attracting government and local corporate clients. “Our move into data centres was driven by our clients, they don’t want another data provider,” Goswami told OBG.

Data providers will also have to convince customers of the benefits of paying monthly subscriptions for cloud services, rather than one-off investments in IT solutions. “At TSTT we use Oracle’s Peoplesoft applications. We could host Peoplesoft at our data centre and offer that service to clients. It changes from a capital expenditure model to an operational expenditure model,” Goswami told OBG.

However, help is at hand from some enterprise resource planning (ERP) software firms such as Oracle and SAP. “Regarding data privacy and residency, people don’t question where the data from their Hotmail or Gmail email accounts is stored,” Aqui told OBG. “What we are seeing now is business applications for banking or manufacturing moving to the cloud, and the ERP application vendors are encouraging their clients to move to the cloud. Instead of renewing their annual software licence, customers are offered cloud versions at a lower price. But what about banks or other regulated companies that have software applications they have been using for 15 years and don’t want to move outside the country? That is what drives demand for data centres in T&T.”

The primary challenge of data storage providers is assuring banks and large local companies that their financial data will be secure on the cloud. However, this could be a slow process given that T&T has historically been a slower adopter of IT solutions. Companies are trying to create demand by building data centres, but there is a potential risk of oversupply. “Data centres are a significant investment and you really need to ensure they are at least three-quarters full. At the moment there’s no guarantee that will happen,” Aqui told OBG.

Future Plans

The next two years will see data providers undertake more intense marketing and promotion strategies to sell the benefits of cloud computing and win market share among important government and large corporate clients. The development of Tier-3 data centres with security certifications in T&T, and the option of backup services in other facilities means the sector may have reached the critical mass needed to persuade clients.