Description
The Milan data centre market has developed rapidly as hyperscale clouds have landed in Italy and pushed demand for data centre colocation infrastructure. This has attracted multiple new operators with customer-driven builds, although the level of demand could support speculative projects or more new entrants.
All the major US public clouds have come online in Italy. The initial wave was deployed within colocation environments, but Microsoft brought online its first self-build earlier this year. It is planning more self-builds in multiple locations to complement colocation deployments with third party operators.
Although Milan’s regulatory framework is not as arduous as markets like Frankfurt or Paris, it can be challenging to navigate, especially as builds get bigger. Regional and national governments are supportive of the industry and the government of Lombardy, with input from the Italian Datacenter Association, adopted guidelines for new data centre development in Milan in June 2024. These were designed with the intention to be built into regional – and potentially even national – law. Projects on brownfield or other land for regeneration, with access to power or on-site (renewable) energy generation, will be prioritised.
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 2024, the Milan market is projected to be valued at €465.1m and grow at a five-year CAGR of 30.1%. Colocation inventory in Milan is estimated to be ~180.6MW in 2024 and expected to reach 936.7MW by 2029.
There are good reasons to be optimistic about the market. Cloud adoption is still nascent but being pushed by the Italian government, and US CSPs are working with local companies on sovereign cloud services for the public sector and regulated industries. Fibre and power infrastructure are being expanded and upgraded, and growth drivers are coming outside of Italy as well. Constraints around land and power in the FLAP-D markets are creating overflow demand flowing into southern Europe, and Italy may 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 and connecting through to Milan to provide diversity and alternatives to increasingly congested Marseille. Milan is developing into a southern gateway point to Frankfurt and other European destinations. The strategic importance and critical mass being developed will drive traffic levels that are sure to translate 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
