The Milan data centre market is developing rapidly as hyperscale clouds land in Italy and push demand for data centre colocation infrastructure. All the major US-based public clouds have come online in Italy (Microsoft is the exception, but is very close) and the existing hyperscale footprint is fully supported by colocation environments. Only Microsoft looks to be taking the self-build route, but this is meant to complement existing deployments in colocation facilities.
The paucity of self-building is a function of the market’s unique contours. While Italy has a relatively easy permitting process and land is available, there are challenges when it comes to data centre development. Italy’s regulatory framework can be difficult to navigate and the power situation is complicated, exacerbated by the geopolitical situation in Europe. Building large-scale facilities in Italy can also come up against significant roadblocks if a project is on a culturally significant archaeological site or an undiscovered historical landmark. If something like this is encountered, a project can be immediately shut down for several years.
The Milan data centre colocation market is still at a relatively early stage of development but is expected to scale and mature rapidly. At the end of 2023, the Milan market is projected to be valued at €426.3m and grow at a five-year CAGR of 30.8%. Colocation inventory in Milan is estimated to be ~159.27MW in 2023 and expected to more than triple to reach 496.5MW by 2026 and 913.4MW in 2028.
There are good reasons to be optimistic. Italy has had cloud infrastructure in-country for a while, but overall adoption is nascent and still emerging. The Italian government is now pushing cloud adoption and this should open the door for cloud uptake from the public sector, while both the private and public sectors continue to invest in modernising the country’s fibre infrastructure. There are growth drivers coming outside of Italy as well. Constraints around land and power in the FLAP-D markets are creating overflow demand flowing into southern Europe, with Italy and Spain positioned to benefit, and Italy will also serve regional markets that will not warrant their own cloud regions.
Connectivity is one of the final pieces of the puzzle. Genoa is emerging as a connectivity hub with numerous subsea cables landing here and connecting through to Milan. This will provide diversity and an alternative to increasingly congested Marseille, enabling Milan to act as a southern gateway point into Frankfurt and other European destinations. The strategic importance and critical mass being developed is going to create a hub and spoke effect in southern Europe and drive traffic levels that are sure to translate directly into data centre and interconnection demand in Milan.
This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Milan or find a service provider. Structure Research now has DCI reports for the European FLAP markets plus Milan and Madrid in southern Europe.
Check out the report preview HERE