The data centre industry is at an interesting crossroads, beleaguered by a perfect storm of powerful forces that are transforming its very paradigms. From the unstinted demand for data, fuelled by developments in artificial intelligence, cloud, and edge technology, to the growing necessity for sustainable and efficient operations, the industry is experiencing a sea change. For companies that operate in such a diverse economy, the acknowledgement of major trends, the understanding of the strategic implications of the location of the data centre, and the management of changes in owner and operator issues are pivotal.
This article examines the primary services and solutions being provided in this fast-moving industry and how top organisations are empowering their customers to not just address the needs of today but also develop robust and future-ready digital infrastructure. Furthermore, it addresses the major adaptations necessary to address new market needs, namely in the field of sustainable solutions, the necessity to create key skill sets, and the ongoing challenge of rising energy expenses. Here is what Luca D’Alleva, Head of Service for Cost Management Italy & Iberia, BCS, told us.
What are the main services and solutions you offer in the data centre sector? What are your strengths, and what distinguishes you from your competitors?
At BCS, we specialise in providing consultancy services for the design, construction, and operation of digitally built assets, with a particular focus on data centres and critical infrastructure. Our main services include Advisory, Programme Management, Land Intelligence, Project Management, and Cost & Commercial Management, allowing us to support clients throughout the entire lifecycle of their data centre projects. Our key strengths lie in our deep specialist expertise, our integrated and people-focused approach, and our proven track record. Since our founding in 2016, we have consistently achieved a compound annual growth rate higher than our competitors and have advised on over £15 billions of investment decisions.
What distinguishes us is our strong culture: we listen first, embrace change readily, challenge the status quo, and always place people, our clients and teams, at the centre of everything we do. We help our customers build efficient, secure, and sustainable data centres by combining technical excellence with a genuine commitment to environmental and social responsibility. We view technology not just as a tool but as part of a broader responsibility to create a positive digital future. Our teams bring cross-sector innovation, rigorous resource management, and a forward-looking mindset to each project, ensuring solutions are not just fit for today but sustainable for the future. Looking ahead, we aim to deepen our capabilities in delivering digital built assets by investing in new skills, technologies, and sustainable methodologies.
Could you describe the current state of the industry, identifying the prominent trends that are shaping it?
The data centre market across Europe, including Italy and the UK, is experiencing rapid growth, driven by increasing demand for digital infrastructure to support AI, cloud computing, and edge technologies. The European data centre market is projected to experience substantial growth, exceeding USD 291 billion between 2024 and 2028. However, we anticipate capacity constraints in key hubs like Frankfurt, London, Amsterdam, Paris, and Dublin as early as 2025. This is driving development towards secondary markets, with Milan, Warsaw, and Berlin becoming increasingly attractive.
Specifically, Italy is emerging as a strategic data centre location. Its geographic position and robust connectivity, supported by over 33 submarine cables, are key factors. Milan is seeing significant investment from global hyperscalers such as Google and Microsoft. Turning to the UK, the data centre market is also poised for considerable growth, forecast to increase by nearly USD 38 billion between 2024 and 2028. This growth is fuelled by multi-cloud adoption, 5G expansion, and the integration of AI. However, connection delays to the national electricity grid are presenting challenges, forcing operators to explore alternative energy sources, including gas.
What are the main drivers that companies consider when choosing where to locate their data centres, and how is technology evolving in this field, with a focus on the most promising innovations?
The data centre industry is being shaped by several key trends. Firstly, the rise of artificial intelligence, particularly machine learning and deep learning, is driving demand for high-density, high-performance data centres equipped with GPU infrastructure to support these computationally intensive workloads. Secondly, sustainability has become a major focus, with a shift toward green data centres that employ technologies such as liquid immersion cooling and heat reuse systems. The industry is also making a broader commitment to net-zero targets, exemplified by initiatives like the Climate Neutral Data Centre Pact, which aims to achieve 100% renewable energy usage by 2030. Finally, the growth of edge computing is another significant trend. The increasing prevalence of real-time applications and the Internet of Things (IoT) is fuelling the development of micro and edge data centres. These facilities bring computing resources closer to end users, improving latency and reliability for applications that require near-instantaneous response times.
Several key elements come into play. Firstly, access to renewable energy is crucial to meet increasingly important ESG goals. Secondly, a robust connectivity infrastructure, including reliable fibre networks and submarine cables, is essential. Thirdly, companies look for favourable regulatory environments, particularly concerning data sovereignty and cybersecurity. Finally, the availability of land, skilled labour, and financial incentives for infrastructure development are also critical considerations.
What are the main challenges facing data centre owners and operators today, and how is the demand for data centre services changing, with a focus on emerging customer needs?
Despite these exciting developments, the data centre market faces several key challenges. Firstly, rising energy costs are significantly affecting the financial viability of some projects, particularly in markets like the UK. Secondly, cybersecurity risks are growing in tandem with accelerated cloud adoption and the evolving threat landscape. Finally, skills shortages persist across the sector, with the demand for qualified professionals consistently outpacing the available supply. The data centre market is not only growing but also evolving rapidly. Customer needs are changing significantly, with growing expectations for sustainable and low-carbon infrastructure. They are also demanding flexible service models, such as managed services and colocation, to better meet their specific requirements. Finally, there’s an increasing need for edge capabilities to support latency-sensitive and data-intensive applications. Meeting these evolving demands will be crucial for success in the years to come.
Turning to the geographical context, what are the specificities of the European data centre market? Are there cultural, regulatory or infrastructural factors influencing the development of the sector?
The European data centre market is shaped by a mix of cultural expectations, regulatory frameworks, infrastructure maturity, and varying levels of talent availability across regions. While Europe is broadly unified in its digital ambitions, local differences significantly influence how and where data centres are developed and operated.
Cultural attitudes towards digitalisation, sustainability, and land use differ across countries. For example, Northern Europe tends to have a more established public understanding of digital infrastructure and its environmental impact, often driving community engagement and early planning permissions. Regulatory factors are central to how the sector evolves. The GDPR (General Data Protection Regulation) strongly influences data localisation decisions and architectural choices, pushing companies to host data within specific jurisdictions. The Energy Efficiency Directive (EED) requires operators to meet stringent reporting and sustainability standards, which is accelerating investment in green technologies and more efficient infrastructure.
And the impact of European regulations?
The European data centre market can be broadly categorised into three distinct geographic regions, each with its own characteristics and trends. Northern Europe, which includes countries like Sweden, Finland, Denmark, and Norway, places a strong emphasis on green energy and benefits from cool climates that are well-suited for hosting AI and data-intensive workloads. This region boasts high grid stability, favourable policies, and strong public trust in digital infrastructure. For example, Sweden offers tax incentives for data centre operators, while Norway utilises 100% renewable energy.
Central Europe, home to core markets such as Germany, the Netherlands, France, and the United Kingdom (often referred to as FLAP-D), faces challenges related to grid saturation and land scarcity. Although regulations in this region are mature, the existing infrastructure is under pressure due to explosive demand. While talent availability is relatively strong, competition for skilled workers is intense. Southern Europe, encompassing countries like Italy, Spain, Portugal, and Greece, is rapidly emerging as a new hub for data centres. This region offers available land, strategic connectivity, and increasing cloud adoption. The regulatory landscapes in these countries are evolving, with a strong alignment to EU digital targets. However, challenges include slower permitting processes and the need to upskill a newer technical workforce. Despite these hurdles, cities like Milan and Madrid are becoming increasingly attractive to hyper-scalers looking to expand beyond the saturated core markets of Central Europe.
What is your vision for the future of the data centre industry? What role do you envisage for BCS in this evolving scenario?
We translate complexity into clarity, guiding our clients through challenges such as ESG (Environmental, Social, and Governance) reporting, regulatory compliance, and innovation planning. We provide expert guidance and support to help our customers navigate the ever-changing landscape of the data centre industry. Our approach is deeply customer-centric, flexible, and proactive.
We go beyond merely delivering solutions – we empower our clients to lead confidently into the future. By understanding their unique needs and goals, we tailor our services to drive success and help them stay ahead of the curve. As the data centre market continues to grow and mature, BCS is poised to support and drive positive change. We are committed to helping shape a data centre industry that is more responsible, resilient, and ready for the digital age. Through our expertise, innovation, and unwavering dedication to our clients, we aim to be a catalyst for progress and a trusted partner in the journey towards a sustainable and thriving future.
