Barcelona drives data centre boom while Ireland struggles to catch up

Barcelona drives data centre boom while Ireland struggles to catch up

While Barcelona and Ireland are on distinct trajectories, they’re aligned in their pursuit of creating robust, efficient and sustainable digital infrastructures. Barcelona’s proactive investment strategy is setting the city on course to become a key digital hub, while Ireland faces the urgent need to enhance its approach and appeal to remain competitive.

So far in 2024, over US$7 billion has been invested in data centres across Europe, highlighting the region’s growing importance in the data centre market, according to data from Linklaters. By 2027, the economic benefits enabled by global data centres could reach up to US$6.3 trillion per annum, supporting around 650,000 jobs directly, and countless more indirectly, as mentioned by Andy Power, CEO, Digital Realty, in The Value of Data Centres Report.

Continuing to look at Europe, Pb7 Research highlighted in 2018 that the Dutch data centre market is good for nearly 13,000 jobs and makes an economic contribution of more than a billion Euros.

Data centres are undoubtedly a crucial part of the digital economy. Nonetheless, depending on where you place your finger on the globe also depends on how equitable the operations are.

Digital Realty recently released two pieces of data that are key in analysing demand and development of data centre activities; a report in collaboration with Cambra de Comerç de Barcelona and DE-CIX, prepared by the analysis firm Foundry, as well as research in partnership with Hewlett Packard Enterprise focusing on Irish enterprises.

The Digital Port of the Mediterranean report analysed the effect of investment in data centres, highlighting the steps to be taken to consolidate the region as a node of interconnection between Europe, North Africa and the Middle East. Moreover, the Ireland survey, commissioned by Amárach Research, surveyed 150 senior IT and business decision-makers and explored the context around Ireland’s pursuit of digital innovation, and how the country’s IT environment is evolving to enable the transition.

The digital port of the Mediterranean

According to the report, Barcelona has historically not been a destination for data centre investments – by 2022, the capacity installed in data centres in the city represented roughly one-third of that available in Milan, and less than half of that in Marseille. However, by 2025, installed capacity in data centres is expected to reach 173MW, and the multiplier effect of this investment on the region’s GDP would reach over €7 billion and generate more than 2,200 jobs.

“DE-CIX bet on Barcelona two and a half years ago because we believe in the city’s bright

digital future,” said Theresa Bobis, Regional Director Southern Europe, DE-CIX. “Now we see the ecosystem is evolving step by step as we have already seen in other metropolises around the world. Thanks to its powerful economy and digital industry, its data traffic is configured as a balanced combination of the different players of the digital infrastructure: ISP, content, enterprises, etc.”

The risk of lagging behind

The key theme throughout this research is that Irish enterprises risk being left behind if they don’t explore new technologies. Understandably, it’s a challenging feat when operators and partners are sceptical of investing in the region – the data centre moratorium implemented by EirGrid remains in effect, potentially jeopardising the future of Irish businesses. According to The Irish Times, Digital Infrastructure Ireland (DII) notes that the ongoing uncertainty is likely driving investment to other European markets.

Despite this, two years after the inaugural report by Digital Realty and HPE, the percentage of Irish-headquartered businesses unaware of their organisation’s IT infrastructure has nearly halved to 10%. It also acknowledges a slight increase (45% to 51%) in the number of organisations planning to migrate to a hybrid IT environment to leverage both on-premises systems and off-premises cloud/hosted resources.

The demand for services and improved operations is there, but if the infrastructure isn’t up to global speed, organisations may look to capitalise elsewhere, emphasising the notion that Ireland is trailing its global counterparts.

“Many Irish organisations are at risk of their IT infrastructure becoming unfit for purpose if they don’t catch up with the rest of the world in the adoption of hybrid IT,” said Séamus Dunne, Managing Director Digital Realty Ireland & UK. “After several years of economic uncertainty, green shoots of recovery in the Irish market are starting to show. But companies can’t leave themselves in a position where their IT infrastructure means they’re unable to drive efficiencies and embrace new technologies. 

“The shift is happening, slowly, and it’s clear that businesses now have a better understanding of their overall IT strategy, but the gap between international peers needs to close,” Dunne added.

What’s next?

Comparing the two, it’s evident that Barcelona’s proactive development strategy is paying off. But there is also room for improvement despite this success. Considering the saturation of companies and talent specialising in digital technologies in Barcelona, the city needs to continue to attract data centres and telecommunications networks to make the digital port a priority strategy, the Mediterranean report said.

On the other hand, Ireland’s cautionary stance could risk the outside support for businesses to deliver their IT strategies. “At times of increasing adoption of AI, exponential data growth and expanding sustainability requirements, not just from legislation but also end-customers, Irish organisations are under significant pressure to create an IT environment that can adapt to rapid shifts,” said Ray McGann, Managing Director of Hewlett Packard Enterprise Ireland. There was also an emphasis on finding the right partner to address data management, compliance and security concerns, and how this will be paramount to future success.

A unified vision for the future

Both regions strive to build resilient digital ecosystems. Yet, it’s down to innovation and economic improvements that will ultimately determine whether they can alleviate existing pressures or propel them into significant growth.

Mentioned in the Mediterranean report, this sums up the duality of two very different regions: “It is therefore crucial that administrations develop a strategic plan that integrates various actions and involves the participation of the main economic players. These actions include the simplification of administrative procedures for the construction of data centres, as well as a thorough review of the planning of the electricity grid to ensure an efficient and reliable energy supply.”

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