Oracle is building its first data center in Brazil, it confirmed at Oracle Day in Chile, with the facility on target to be completed by the end of 2014.

With the new facility, Oracle's global cloud infrastructure will include 18 data centers designed to support the company's open-source based cloud portfolio, including applications, social platform and infrastructure services.

The construction was in part a reaction to the controversy over the lack of data sovereignty and the need for local data storage, which became a major discussion topic in Brazil this year during the Marco Civil da Internet (internet bill of rights) debate.

Brazil's federal government had attempted to include a local storage directive in the bill, in response to growing concerns created by the US National Security Agency (NSA) spying scandal.

However, in order to ease the bills passage through the lower house of the National Congress of Brazil, the legislation was amended.

Lobbying from industry, with representations from vendors such as Google and Twitter's general director for Brazil, questioned the government's arguments.

Many feared that Brazilian national competitiveness could be affected.

Oracle’s Latin American applications SVP Eduardo López told BNAmericas that issue about the location of data storage had become “a bit of a red herring.”

"In reality all of Oracle's data centers that provide cloud and Software-as-a-Service (SaaS) are the same, developed in the same way, and are interconnected,” López said.

"They are all hi-tech. It's not as if the Brazil data center will be designed in a unique way for Brazil.”

The Oracle Corporation designs the data centers and connects them with the others ones around the globe forming a network for the purposes of backup, he said.

The original statement of intent to build a Brazilian data center was made in December 2013 by CEO Mark Hurd.

There are no plans for more data centers in the region, but that may change if demand grows, said López.

“As the business grows, we will distribute data centers throughout Latin America," López said.

"We'll finish one, put it in operation and then look at the next one".