Recent research from Colliers reported the Italian data centre market mirrors the European trend of surging demand from investors and operators seeking strategic locations. The desire for available power, low latency and connectivity are drivers in the search for success, and Italy, notably Milan, holds a pivotal European position for distributing and receiving content due to its robust connectivity and sub-marine backbone connections.
Massimo Bandinelli, Marketing Manager, Aruba Cloud, explains how the region is emerging as a beacon of opportunity and discusses several factors for its meteoric rise as one of Europe’s newest data hubs.
The Italian cloud market is turning the heads of cloud providers all across Europe.
Now worth over €5.5 billion, the country has emerged as an increasingly popular destination to establish data centres. Infrastructure services (IaaS) are also contributing to this market expansion, driving growth valued at €1.51 billion, marking a 29% increase since 2022, according to the Cloud Transformation Observatory.
The region has recently attracted substantial investments from leading international hyperscalers, and numbers are only expected to keep booming. According to a study by Milan Polytechnic, investments in the Italian data centre industry are projected to soar to €15 billion by 2025.
So, what’s making this area such a hot spot for investment and development?
Overcoming FLAP-D obstacles
In recent years, the European data centre market has drifted away from the once-dominant FLAP-D region (Frankfurt, London, Amsterdam, Paris, Dublin), giving countries like Italy, Spain and Portugal room to shine. This shift is driven by internal factors, for example energy usage concerns in the Netherlands, leading to government-enforced permit delays on large sites.
Perched on the Mediterranean coastline, countries like Italy and Spain are also geographically strategic locations. The placement of these regions provides strong connectivity to North African and Middle Eastern markets, as well as having connectivity with Northern and West Europe, which is proving advantageous for businesses looking to expand their reach across continents. This accessibility ensures lower latency and faster connectivity, attracting investment and facilitating international business operations.
Regional cloud providers are on the rise
Hyperscalers aren’t quite cutting it anymore, especially when it comes to flexibility and time efficiency. Global businesses typically require a more tailored approach to cloud migration, calling for a solution that breaks away from the ‘one-size-fits-all’ dynamic.
That’s where regional cloud providers have stepped up, offering highly customisable, localised services that meet the demands of international businesses. The growing popularity among these regional providers has positioned Italy as Europe’s newest data hub, establishing Italy as a preferred cloud region, with the data centre sector following closely behind.
The compliance factor
The EU has implemented some particularly stringent laws regarding data in the last decade, namely the General Data Protection Act (GDPR), which dictates all businesses to handle personal information and data transparently and responsibly.
International companies operating in Europe are required to play by these rules, so they must think carefully when implementing data practices. That’s where Italy comes in.
By leveraging data services in the growing cloud region, global companies can meet the strict requirements enforced by the EU, minimising the risk of hefty fines and privacy violations. This sharp focus on regulatory standards has made Italy stand out as a promising option for companies seeking out secure and compliant data storage.
The socio-economic shift
Europe’s socio-economic climate has vastly changed, which has spurred a reassessment of cloud adoption with a growing emphasis on national cloud regions. These regions offer irrefutable benefits, fostering economic growth and technological innovation, and in turn, creating new occupational opportunities for the local community.
Italy has stood at the forefront of European sovereign cloud initiatives, spearheading Digital Transformation and cloud migration. Programmes like the Triennial Plan for IT in Public Administration, the National Recovery and Resilience Plan (PNRR) and the Cloud Italia Strategy are just a few examples of Italy’s proactive role in evolving cloud offerings.
In light of this, organisations across the continent are increasingly relying on private cloud services as they navigate their cloud journey amid ever-changing socio-economic challenges.
The quest for digital sovereignty
Digital sovereignty has taken the front seat for many European states, with more EU-operating businesses wanting to take control of their own data. This drive has proved to be a boon for Italy’s data centre industry, positioning the country as a tempting option for local cloud providers. Geopolitical events have also pushed collaboration across European countries to support this initiative, helping to fuel Italy’s expansion further.
What’s next for Italy’s cloud and data centre market?
With enhanced localisation capabilities, greater familiarity with cultural assets and an in-depth understanding of the EU’s stringent rules and regulations, it comes as no surprise that regional cloud providers are becoming the new go-to for businesses across Europe. As momentum continues to build, Italy stands ready to reap the benefits of economic growth and solidify its position as a key player in the continent’s digital future.
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