Why Colocation Data Centers Are Moving South?
- Ad Min
- Jun 24
- 7 min read
The demand for data centers keeps growing, and it's easy to see why. Businesses run online, governments offer more digital services, and AI needs huge amounts of computing power.
As a result, companies need more space to store, process, and manage data. For years, most attention stayed on major markets in northern Europe.
However, that is starting to change. Southern Europe now attracts growing interest, and countries such as Italy, Spain, France, and Portugal are moving into focus.
That shift raises an important question. Why are more operators and investors looking south, and what opportunities do they see there?
Maarten Goeman works at the center of that growth. As VP of Corporate Development at Mediterra DataCenters, he helps expand the company's presence across southern Europe. His work includes finding sites, assessing markets, and supporting growth through both new developments and acquisitions.
Before entering the industry, he worked in corporate finance at ING. Speaking with Paul on the Built to Scale podcast, Maarten explains what drives demand in the region, where the best opportunities sit, and why local infrastructure matters more than many people realize.
In this article, we will learn why southern Europe is becoming a key market for colocation data centers. We will look at what makes a good site, why secondary cities offer strong potential, and how operators balance growth with sustainability.
We will also explore the role of AI, the importance of staying close to customers, and what the next few years could bring for the region's data center market.
Why Southern Europe Is the Next Colocation Data Center Market
Southern Europe is fast becoming a hotspot for colocation data centers. The growth already seen up north is now moving south. The focus sits on four countries: Italy, Spain, France, and Portugal.
AI clearly drives demand higher. But it isn't the only push. Companies and governments are going digital, and that needs basic colocation services too.
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These services aren't the same as big cloud work. Most customers are firms or government bodies. They visit sites in person to swap servers or fix things. So they want a data center close by. That's why local sites matter so much.
What's driving the southern focus
The UK and north-western Europe sit a bit ahead on digital uptake. The South will catch up, and demand for online services will grow with it. Some of that goes through big cloud providers. The rest suit smaller providers with specific needs.
Oddly enough, hyperscalers moving in actually helps. The shift away from in-house servers tends to follow three steps:
Firms once kept servers in a back room with air conditioning.
Cloud adoption breaks that habit and makes one feel more comfortable.
Many big firms then go hybrid, with part in the cloud and part in their own data center.
How long until the South catches up
Two years? That's ambitious. Three to four years feels more realistic. Progress shifts from region to region, though. Milan and Madrid already lead with dense clusters. Other areas still lag well behind.
Building takes time anyway. Sites need building, delivering, and opening up to customers. There's a bigger question, too.
Are these firms and governments ready to move off-site yet? And can the local infrastructure handle it? For now, the south shows clear, unmet demand. So the timing looks strong.
What Makes a Site Right for a Colocation Data Center
Picking the right site isn't simple. It takes a clear checklist and plenty of discipline. A few things must line up before any deal goes ahead.
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The key things a site needs
Some boxes matter more than others:
Zoning that allows a data center. Buying farmland and hoping to convert it is risky. That process can drag on for years with no clear result. So sites already zoned for data centers win every time.
Power. The aim is around 10 megawatts of grid capacity. That's small next to the giant projects in the news. So talks with the grid company stay easier.
Connectivity. Fiber routes should sit nearby or connect easily. Luckily, many countries already run strong fiber networks. So this rarely becomes a big problem.
Council support. Even with the right zoning, the council may want more. Sustainability is clearly a big deal in data centers now. So early talks with authorities matter before you buy.
Why local teams make all the difference
Running sites across four countries is tough. Good discipline starts with one truth: " No " is also an answer. Plenty of proposals come in. So the trick is to drop the weak ones fast and focus on the rest.
Local people are essential here. They speak the language and know the rules. And those rules shift between countries, sometimes even between regions. A solid network of brokers and advisors helps, too. They spot chances early and flag what's coming to market.
A smaller company can't source everything alone. So that local network does the heavy lifting. Above all, focus is key. Saying no to the wrong sites stops you from buying land where a profitable data center just won't work.
How Colocation Data Centers Grow While Saving Water
Steady growth lies ahead. Two data centers are running today. A third is now under construction in Barcelona. Two more sites are secured but not yet announced. So the count is on track to reach five.
There's a bigger goal this year, too. The aim is to buy an operating data center platform. That way, growth doesn't only come from new builds. An acquisition adds revenue, EBITDA, and customers straight away. And the focus stays on Italy and Spain first.
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Do data centers really waste water?
Water comes up everywhere, especially in summer. So is it a real worry? Partly, yes. Many data centers use water to cool their servers. In southern Europe, it gets hot, and water runs short. So, using drinking water for cooling is clearly not sustainable.
There's a smarter way around this. The trick is dry cooling technology. It runs on a closed loop, much like home heating.
Here's how it works:
The water stays sealed inside the loop.
It only carries the cold into the data halls.
Dry coolers use air and compressors to chill the water.
So no drinking water gets used for cooling. In dry regions, that matters a lot.
The digital paradox nobody talks about
Here's the odd part. People say they don't want data centers nearby. They're big boxes, a bit noisy, and they use power. In crowded countries with scarce land, that worry makes sense.
But the reality cuts the other way. Everyone wants everything at their fingertips. We stream films, chat, scroll, and check the news all day. We're online every hour, really. And all of that runs on the cloud. The cloud, of course, is just data centers.
Local Colocation Data Centers Are the Smart Bet
Your files don't float in the sky. They sit on servers in a data center somewhere. Every click, swipe, or tap pulls data from one. That message from a friend, or the next episode of a show, travels back to your phone.
The same goes for business. People rarely visit a bank branch now. They bank, shop, book travel, and pay bills online. Each action sends data to a center and gets a result back. So data centers aren't optional. They power how the world runs today.
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Why secondary cities are the smart bet
Big hubs like Milan, Paris, and Madrid pull most attention. They offer great connectivity, so a presence there helps. But the real chance sits in tier-two cities. Being close to customers brings two clear wins:
Convenience. Picture a firm in Naples with its data in Milan. A simple server swap wastes a whole day. A local center cuts that to a 45-minute drive.
Lower latency. Data travelling far slows things down. A few milliseconds won't bother us. But some apps need speed, and big data flows strain the network.
Local councils often welcome these talks too. They've got their own data to store, sometimes for hospitals or government bodies. So they'd rather keep it in their own city. That support helps secure permits and builds a local ecosystem.
What the next few years hold
The building phase is far from over. Two centers run today, three projects sit in development, and more wait in the pipeline.
The long-term aim is around 20 data centers across these countries. That covers the big cities and, just as vital, the secondary ones too. And AI will clearly shape demand from here.
Conclusion
Southern Europe clearly offers strong opportunities for data center growth. Demand keeps rising as more firms, councils, and public services move online. At the same time, AI adds even more pressure on digital infrastructure.
However, success doesn't come from building anywhere. Companies need the right sites, reliable power, strong fiber links, and local support. They also need practical solutions that reduce water use and fit local needs.
That's why local facilities matter so much. They keep data closer to users, improve performance, and make day-to-day operations easier. Moreover, secondary cities offer plenty of room for growth and often welcome new investment.
The next few years should bring steady expansion across Italy, Spain, France, and Portugal. As digital demand grows, colocation data centers will play a bigger role in supporting businesses, governments, and everyday online services. The trend is clear, and the market still has plenty of room to grow.
FAQs
How do colocation data centers support business continuity?
Power cuts and technical issues can happen anywhere. Colocation data centers use backup systems and redundant infrastructure. This helps keep services running during unexpected problems.
What industries benefit most from colocation data centers?
Many sectors rely on colocation data centers. Banks, healthcare providers, retailers, manufacturers, and public organisations all need secure and reliable data storage.
How long does it take to build colocation data centers?
The timeline depends on the project size and location. However, most colocation data centers take several months or even years to complete.
Do colocation data centers help companies meet compliance requirements?
Yes, they often do. Many colocation data centers follow recognised standards and regulations. This helps businesses meet security and data protection requirements.
How do colocation data centers handle power outages?
Reliable power is essential. Most colocation data centers use generators, battery systems, and backup power sources. This reduces downtime and protects customer operations.
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