7 Tips Before Establishing a CDN PoP in Brazil

It should be completely unnecessary to write this, but Brazil should not be a 1 PoP country, it's HUGE! In this article, we will outline some of our experiences with planning, deployment, and testing of Content Delivery Networks in Brazil.

Before starting, it's important to grasp the physical size of Brazil. The country covers about 50% of South America, and the distance from North to South Brazil is roughly the same as the distance from the East to West coast in the USA.

Boa Vista, the capital of Roraima state, in the North of Brazil, is actually located closer to Miami than to São Paulo.

1) Location

As just mentioned, Brazil is not a single PoP country. The distance from North to South in Brazil is 4394 kilometres.

Theoretically, this distance should give a round-trip-of around 50ms from the North to South of Brazil if you were using a straight fibre cable. The reality is that, the round-trip from São Paulo to Manaus, which is the largest metropolitan city in the North of Brazil, is around 200ms.

Due to the landing point of sub-sea fibre cables in Recife, much of the Northeastern parts of Brazil can be better served from a CDN PoP in Miami than from a CDN PoP in the South of Brazil.

Locating PoPs in one of the neighbouring countries is also of little help. From a geographical point of view, cities like Buenos Aires in Argentina, and Montevideo in Uruguay, seem to be well located to serve the Southern part of Brazil. However, the infrastructure between the countries is not optimal, and you will usually get better results serving content from the USA to Brazil than from any of the other neighbouring countries.

With a single PoP strategy in Brazil, you only have two real location options. These are Rio de Janeiro or São Paulo, with São Paulo as the clear favourite. São Paulo is the internet hub of Brazil and responsible for, as much as 80% of the national internet exchange traffic, reaching 700 Gbit/s annually. São Paulo’s exchange point has been controlled by Verizon since the end of 2014, after the acquisition of Terremark Latin America, currently the only one not managed by Núcleo de Informação e Coordenação do Ponto BR, NIC.br.

2) Colocation Providers

It's difficult to recommend one specific provider. In this previous article 100+ Brazilian Co-location Providers, we tried to summarise all colocation providers.

If you already have agreements with providers like Equinix, Lumen or Softlayer it's worth talking with your account manager to see if you can get a pricing model similar to your foreign pricing model.

Based on experience, most colocation providers add an extra 10% - 15% of negotiation margin in their initial proposal.

You need to make sure that the provider has an uplink that is at least, connected to the internet exchange point, or IXP, also known as PPTMetro in Portuguese, in at least one of the major Brazilian national networks like Embratel.

Location of Internet Exchange Points in Brazil

Equinix operates the largest colocation infrastructure in Brazil, with 4 data centers located in the states of São Paulo and Rio de Janeiro, which have a total of 10 thousand square meters. Both facilities are completely interconnected. The São Paulo facilities are closely connected to the São Paulo IXP, the most important in the country. Equinix offer carrier-neutral colocation space allowing for connection with all the major Brazilian ISPs like GVT, Embratel, Algar, Vivo and Oi. Equinix expanded their operations in Latin America after the acquisition of the Brazilian company Alog.

In September 2015, Softlayer deployed its second cloud computing infrastructure in Brazil, offering a public cloud focusing on local clients that had to use facilities abroad and others in Latin America. The data center is located in the city of Jundiaí, less than 100 km from the other which is located in the city of Hortolândia.

Level 3 has data center infrastructures located in the states of São Paulo, Rio de Janeiro and Paraná.

3) Business Practice

The Brazilian model for pricing data center services is similar to the ones you find in the USA. You will have to pay for rack space, symmetric bandwidth, power consumption and network ports as, more or less, independent components.

Usually, it's beneficial to co-locate your own switch in the rack if you need 3 or more network ports.

Most data centers allow third-party service providers in their facilities, and, if you need hot-hand services, installation assistance, or other more time consuming tasks that do not require a strict Service Level Agreement, it is worth exploring the option of contracting these services separately from the data center provider. The cost saving here can be 50% or more.

4) Technical Standards

Brazil is not that different from other countries when it comes to data center facilities.

It's important to note that power failures are more frequent in Brazil than in the USA and Europe, so, carefully consider your requirements for battery backup and power generators. During the summer, which is from December to March, both Rio de Janeiro and São Paulo experience frequent thunderstorms making protection against high-voltage sparks important. This type of equipment should be provided by the data center operator with a corresponding SLA. Remember that local power line filters can easily cause service outages.

You will also have to verify with your facility what voltage they are providing. In São Paulo, most facilities provide 110 V as standard, with an option of 220 V, while other cities, including Rio de Janeiro, usually provide 220 V as standard. Not all data centers have 110 V as an option.

5) Sourcing Equipment from Abroad

It's expensive to import your own servers and network equipment to Brazil.

Usually, to calculate the the costs of importing a small quantity of IT equipment add roughly 100% to the value of the equipment. Notice that the tax cost might vary between 10% - 20%, depending on the destination state in Brazil, although it will not vary much between Rio de Janeiro and São Paulo.

Before shipping the goods, you need a customs broker that can handle the import and classification as most datacenter operators do not have an import license. Importing servers with a customs broker that has experience with these types of import should take 4 to 8 weeks, however, if there are irregularities or missing papers, it can take 4 to 6 months.

Warning: Details like a mismatch between the physical size and weight of the goods specified on the Bill of Lading and the actual size and weight can be categorized as irregularities which can be subject to fines.

Warning 2: There are customs brokers who will claim that they can import the goods at a much lower cost. If they do not provide you with an exact calculation of the taxes: Import Duty (II), IPI (Tax on Industrialized Products), ICMS (Value Added Sales Tax), PIS and COFINS (Social Contributions), they will either try to leave you with a bill to be paid after the goods are shipped, or they will smuggle the goods into the country.

6) Sourcing Equipment Locally

Whenever possible, sourcing equipment locally is the preferred strategy. Servers are indeed more expensive in Brazil than what you find abroad, however, mainstream options from OEMs with local manufacturers like Dell and IBM have, usually, comparable pricing to what you find abroad.

Most major equipment manufacturers have some type of representation in Brazil, including niche players like Supermicro. The OEMs that do not produce and assemble equipment in Brazil often leverage importers and distributors that can recover some of the tax expenses, making even imported equipment a bit cheaper than if you import it yourself with your own customs broker.

Besides the cost advantage, there's also a huge time advantage when sourcing equipment locally. Servers are usually delivered in just a couple of days.

Warning: Payment can be more challenging when sourcing locally, not all distributors and resellers work with foreign companies, and they will usually require payment up-front.

7) Import to Brazil at no Additional Cost

This might sound too good to be true, but it's an option worth exploring. Some of the large premium OEMs have internal industry programs that allow you to buy the equipment in your home country, get the equipment there for configuration then deliver it back to the OEM, and then, take care of delivering it to your destination country.

These type of programs are designed to serve large, multi-national enterprises that have operations in many countries, but, if you already have some sort of frame agreement with IBM, HP, or other premium server brands, it's worth exploring this option.