Wednesday, July 6

The ‘data industry’ promises to inject 35,000 million into Spanish GDP, but sets conditions

Investment in data centers in Spain will exceed 3,000 million euros over the next five years, according to the consulting firm Savills Aguirre Newman. The accounts of the digital infrastructure industry is that every euro spent in this sector has a return of between nine and ten for the economy. With the right conditions they can be multiplied by 12, with which these new deployments could generate more than 35,000 million of impact on the Spanish GDP. However, to achieve this return, the sector requests a series of commitments from the administration: facilitating access to green energy, streamlining bureaucracy and supporting the development of the digital economy with more trunk networks or improvements in the education system.

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Spain will collect this investment thanks to the fact that it is one of the emerging markets for the new generation of digital connections. This is how it reflects The interconnection map of southern Europe, a report prepared by the TeleGeography consultancy for three of the three main digital infrastructure companies present in Spain, DE-CIX (the world’s largest manager of Internet traffic exchange neutral points), EllaLink (which has put the first submarine cable linking South America with the Iberian Peninsula in 20 years) and Interxion (provider of independent data centers with more than 100 in 13 countries).

TeleGeography, known for producing the map that maps the thousands of submarine cables that make up the mesh of Internet connections, warns that “the world of networks is undergoing a radical change.” New digital services, such as streaming content or video games, need to get closer to their end user to reduce latency (the delay in establishing a connection) and cost. This is producing a decentralization in the physical part of the Internet. Alternative routes are needed that do not go through the United States, but also through the FLAP, the traditional European data center hub, made up of Frankfurt, London, Amsterdam and Paris.

“Resources are distributed in increasingly decentralized nodes. Europe is no stranger to this trend and the need to modify and distribute network configurations has generated a significant demand for connectivity outside the traditional nodes and towards increasingly closer sub-regions. , like southern Europe “, pick up the report.

Connectivity in this subregion has tripled in the last five years, TeleGeography notes, and will continue to grow. The city that has collected most of this “dizzying” growth is Marseille, the ground anchor point for a large number of submarine cables that cross the Mediterranean, cross Egypt and run towards Asia. The French port has benefited from geopolitical movements that have increased the need to connect Asia and Europe without going through the US. But there is room for more cities to take advantage of this trend, among which the report points to Athens, Barcelona, ​​Lisbon, Madrid, Marseille, Milan, Palermo and Sofia.

Spain, together with Portugal, has in its favor its strategic geographical position on the new routes. It is a better enclave than Marseille to unite the continent with Africa and above all, Latin America. It can also take advantage of its Atlantic slope towards the US, since submarine cables have a useful life of about 25 years and many of the lines between the US and FLAPs in the first Internet era are close to reaching it.

In addition to EllaLink, which connects Sines (Portugal) with Fortaleza (Brazil) since this June and will have special outlets in Madrid, Barcelona and Marseille, in 2022 Google is expected to complete its own submarine cable that will anchor the port of Bilbao and connect Spain directly with Bellport, in New York. The peninsula has increased its bandwidth by 25% in the last five years, notes TeleGeography, with Barcelona increasing 35% and Madrid 18%.

98% of Internet traffic runs through these types of cables, so concentrating them quickly turns you into a pole of connectivity. When that happens, another series of processes are triggered, known as data gravity, since companies in the industry tend to establish themselves close to each other. It is the phenomenon that is taking place in Madrid, where four cloud giants (Google, Amazon, Microsoft and OHV) have announced as a regional hub. “It is clear that Madrid must be included as one of the main cloud interconnection hubs in southern Europe, because in the coming years it is expected the creation of at least four new cloud regions in this market (or in its outskirts) “, the report collects.

Bureaucracy, energy and employment

“It is difficult to imagine the number of licenses that are needed to lay an underwater cable that crosses oceans and beaches. That is why what we are doing in Sines is creating an anchor point for more cables to arrive from North America,” explained Diego Matas , EllaLink’s Chief Operating Officer, during the presentation of The interconnection map of southern Europe this Thursday. Mata explained that the project to build the cable from Portugal to Brazil has lasted about 10 years, of which two have been dedicated exclusively to obtaining the necessary permits.

From the data center sector, infrastructures dedicated to hosting the servers that really make up the cloud in optimal conditions, changes are also requested in the bureaucracy to facilitate their implementation and take advantage of the new wave of digitization. Both in construction permits and, above all, in the planning of energy deployments. The EU obliges this sector to make 100% of the energy it consumes from 2025 be green, so before settling in a specific place it needs to make sure that it will have access to it, since it consumes it in large quantities.

“We need power backbones to be planned taking into account the needs of data centers, because without power the digital economy is not possible,” recalled Raquel Figueruelo, Interxion’s marketing director. “For us, energy and communications are relevant. We have communications, because we have the commitment of EllaLink and DE-CIV. We lack the energy part.” Interxion, which has three data centers in Madrid, is the fifth largest electricity consumer in the entire Community.

Another of the sector’s requests to the Government is an improvement in educational systems so that they better adapt to the context of the new digital economy, as well as more determined support for the entrepreneurial and startup ecosystem.

With these types of changes, they say, Spain can change the trend and gain weight in the new digitization that is coming after the pandemic. “The Iberian Peninsula is becoming an issuer of digital services. Our commercial balance of digital services until five years ago, until the arrival of DE-CIX, was a deficit balance. We had to import digital services. Today we are in ideal conditions to be an issuer of digital and digitization services “, recalled Figueruelo.