Italy Data Center - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Italy Data Center Market size is estimated at 411.4 MW in 2024, and is expected to reach 805.2 MW by 2029, growing at a CAGR of 14.37%. Further, the market is expected to generate colocation revenue of USD 2.00 billion in 2024 and is projected to reach USD 3.92 billion by 2029, growing at a CAGR of 14.37% during the forecast period (2024-2029).

Tier 4 data center accounted for majority share in terms of volume in 2023, and is expected to dominate through out the forecasted period

• The initial data centers were built in accordance with the minimal demand. Hence the data structure facilities created were small. These facilities were mainly Tier 1 & 2 certified due to their minimal requirements, and they had minimum racks installed. These data centers are expected to hold 3% of the market share, which is expected to decrease to 1% by 2029, with the segment accounting for an IT load capacity of 14.1 MW.
• Tier 4 data centers lead the market in terms of capacity. Tier 4 data center capacity is expected to increase from 227.6 MW in 2023 to 918.2 MW in 2029 at a CAGR of 26.2%. The increasing demand for smartphone applications to view streaming content, play online games, and shop online by Italian users has led data center companies to increase the number of racks in their facilities.
• Tier 3 facilities are expected to witness the second-highest growth of 15.8% during the forecast period, while the segment's IT load capacity is expected to grow from 163.06 MW in 2023 to 394.08 MW by 2029. It is also expected to hold a market share of 40.5% in 2023, which is expected to decrease to 29.7% by 2029, owing to the increasing development and infrastructural advancements of facilities to procure Tier 4 certification from the Uptime Institute.
• As more cities adopt smart systems and evolve into smart cities, the demand for huge facilities to process data is expected to grow proportionally. The number of subscribers to VOD in Italy increased by five times, from 3.3 million in 2017 to 15 million in 2021. Thus, BFSI, media and entertainment, and manufacturing are end-user segments expected to boost the growth of Tier 4 and Tier 3 facilities in line with huge data generation.

Italy Data Center Market Trends

Increment in the subscriber penetration rate is boosting the market demand

• Italy has increasing smartphone usage in the country, with a smartphone adoption rate expected to increase from 77% in 2021 to 81% in 2025. Despite a decreasing population, the expected increment in the subscriber penetration rate from 89% in 2021 to 90% by 2025 reflects a promising scenario for adoption.
• However, the decreasing population with a negative growth rate and higher average age play a crucial role in determining device usage in the country. The data from ISTAT highlighted the average age of the population in 2021 to be 45.9 years, compared to 44.9 years in 2017.
• Italy has a unique demographical scenario regarding digitalization and adopting the latest telecommunications technology. The country was among the initial ones to deploy a 3G network and has been ahead of the international timeline. The government legislation on the 'Right To Repair' and 'Planned Obsolescence Law' would allow users to repair their phones more, which may help them avoid expenditure on new smartphones. This may further hamper the growth of the number of new smartphones in the market. This may further lead to a decrease in data generation due to lesser data-generating points in Italy, affecting the demand for data centers in the region.

Investments in the country's FTTH broadband service is boosting the market demand

• Italy has been a significant consumer of broadband services, with companies offering broadband and ultra-broadband services. The overall broadband connections in the country increased from about 62.4% in 2011 to about 93.5% by the end of 2021. The pandemic influenced the restructuring of the services, creating significant demand to utilize the infrastructure for broadband services in Italy. This was also evident in the increase in data traffic by about 150%, from 17,700 to more than 44,200 PB from 2017 to 2021, which further highlights the future growth prospects.
• Fiber connectivity in the region increased from 1.3% in 2011 to 64.4% in 2018, including FTTH and FTTC services. The data from AGCOM highlighted the monthly data consumption per broadband line from 96.6 GB in 2017 to about 210 GB in 2019. Broadband access through residential and business ultra-broadband services by the end of 2021 reached 18.7 million units, accounting for about 31.7 lines for every 100 inhabitants.
• The investments in the country's FTTH broadband services would shape the market during the forecast period. With the significant investments in the past, the infrastructure was greatly benefitted, which would be carried forward by the operators accordingly. In April 2022, prominent players like Telecom Italia's FiberCop and TLC Telecomunicazioni signed an agreement to develop FTTH access jointly. The deep penetration of broadband services availed by the Italian population may help data center facilities to deliver data faster and leverage the network to interact with internet exchanges and telecommunication operators, as required.

Italy Data Center Industry Overview

The Italy Data Center Market is fairly consolidated, with the top five companies occupying 68.57%. The major players in this market are Aruba SpA, Data4, Equinix, Inc., Irideos SpA and Vantage Data Centers LLC (sorted alphabetically).

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