Description
The Milan data centre market is growing rapidly to serve local requirements as well as spillover demand from the constrained FLAP-D (Frankfurt, London, Amsterdam, Paris, Dublin) markets. The government is pushing a cloud-first agenda for the public sector, and there are still hundreds, if not thousands, of on-prem facilities (the majority small ones) that will be shut in favour of cloud and colocation.
The level of demand has attracted multiple new operators to the market. Many of them are proven operators with credible projects but there are also a lot of speculative projects by landowners looking to cash in. Build sizes have been getting bigger which extends the already lengthy permitting process, while grid operator Terna is grappling with hundreds of GWs of grid connection requests, most for renewable energy projects but also a sizeable chunk for data centres.
The Italian government, opposition parties and regional authorities all recognise the strategic importance of the data centre industry. They have been working closely with the Italian Datacenter Association, which was set up in 2023, as well as hyperscalers to understand the sector and its unique requirements. The aim is to get ahead of the game and avoid the bottlenecks and constraints that the FLAP-D markets have run into. The emphasis is on sustainable developments on brownfield sites, of which there are plenty in the Milan area.
Multiple steps are being taken to classify data centres as unique infrastructure, and to standardise, simplify and speed up the permitting and grid connection processes at a national level. But there is still work to be done before new legislation can be approved and no guarantees that the speedier timelines can actually be achieved, especially given the number of projects in the works in Milan.
In the meantime, others may follow AWS and Vantage Data Centers by getting their projects classed as being of national strategic interest. This should speed up the entire process but it is too early to tell whether the reality will match the theory. That said, there are indications that the data centre guidelines adopted in the Milan market in mid 2024 are already having a positive impact on deadlines, while Terna is said to be getting more strategic in approving grid connection requests.
This report is an excellent resource for any service provider, investor, real estate developer or enterprise end user looking to understand and project the data centre market in Milan, or find a service provider. Structure Research now has DCAI reports for the European FLAP markets plus Milan and Madrid in southern Europe, as well as a DCI Market Spotlight report on Rome. The methodology applied continues to be the most robust in the industry. The supporting dataset is built from comprehensive asset-level tracking, capacity is measured purely on a power basis, and inventory is aggregated in tiers according to build status, absorption rates and maximum capacity levels.
