The new business models are generating new trends in all markets, including the data center sector.

Big Data, Artificial Intelligence, and many other technologies are gaining momentum, making data centers increasingly critical assets for all companies.

The volume of information is increasing. According to Gartner, global spending on data center infrastructure is expected to grow by 6% in 2021, recovering from the 10.3% decrease in data center spending in 2020 due to cash flows during the pandemic.

End-user spending on data center infrastructure worldwide (billions of dollars).  

Source: Gartner (October 2020)

Large technology companies are capable of offering services to their customers almost anywhere, either by providing services from other countries or by contracting services from local companies.

This strategy has worked until now, but with the introduction of new technologies, the model is changing. On one hand, low latency is starting to be required (which is becoming a problem for service quality when located far from the computing), and on the other hand, the costs generated by outsourcing make them less competitive by increasing, among other things, their fixed expenses.

Perhaps the increase in information, new technologies, service quality, high fixed expenses, and the need for investment are driving this shift towards the creation of their own data centers, with the significant advantages it will bring.

Many companies may not be able to invest in their data centers due to costs, but they will demand having their Cloud near their Core Business to provide the best service to their internal and external customers, improving latency and making their businesses more competitive.

Large technology companies are already investing in these models and aim to position themselves in Spain in the coming years.

All this interest generated by major technology companies to establish themselves in Spain (due to various socioeconomic, regional, and technological factors, with extensive fiber infrastructure coverage) should serve as a lever to make the country one of the most important international players in the sector, aiming to become a technological hub for all of Europe.

Furthermore, Spain's extensive coastline provides an advantage for submarine cable connections. The connection to North America, South America, and a new player like Africa in the coming years will enable increased revenue and sustainability for many companies.

The €72 billion in investment from Europe should be harnessed to seize this opportunity and boost investment in the Spanish tech hub.

• As mentioned earlier, AWS is already building three data centers in Aragon with an investment of around €2.5 billion.

• Microsoft has announced the opening of a data center region in the Madrid community, with the participation of Telefónica, which will contribute its infrastructure and global strategy in the country.

• Google, another major player that was previously absent, is also investing in building data centers in Spain with the support of Telefónica, making them major cloud competitors in Spain.

• Other companies in the sector, such as Interxión, will open new data centers in Madrid, and the French company Data4, with more than 21 data centers in Europe, will invest over €140 million in its first data center in Spain (Madrid).

It's undeniable that these companies and many others will need to rely on second-tier providers to meet some of their needs in Spain. Therefore, it's crucial to invest in research, development, and innovation (R&D+i) and aim to provide 100% 5G coverage throughout the country. 

5G will bring a significant boost to all sectors, enhancing their sustainability and profitability. Thus, everyone should support this opportunity to attract more technology companies of this caliber to Spain.

It's worth noting that the government will play a significant role in this sector and will need to seek solutions on all fronts, with particular attention to energy generation to provide the necessary energy support for these initiatives. Agreements with REE (Red Eléctrica de España) and electric companies, including renewable sources, will be essential to achieve our objectives.

The same approach will be necessary for all the required procedures to support, as mentioned earlier, all submarine cable projects. Currently, there are 25 cable landing stations in Spain out of 406 worldwide, according to TeleGeography.

For example, the Marea cable, which runs from the coast of Virginia and reaches Bilbao after covering 6,600 km, provides support to Microsoft, Facebook, and Telefónica. Another example is Google's Grace Hopper project, featuring a submarine fiber cable extending over 6,500 km, expected to be completed in 2022, connecting New York, Bude (UK), and Bilbao. These projects are clear examples on which we can rely to become a top-tier technological hub.

Supporting and promoting all public or private initiative projects emerging in Spain, such as the 1,070 km Hub in the Mediterranean Arc (a digital innovation platform), which aims to enhance the competitive advantages of technology professionals and companies in the area. It aims to foster rapid growth of startups and scaleups developing projects related to AI, IoT, cybersecurity, or cloud computing to advance the country's technological innovation.

Finally, it is hoped that this extensive deployment we need to undertake will also enable high-level connectivity throughout Spain, ensuring that even remote or underserved areas, often referred to as the "empty Spain," have access to high-speed internet, as was the case with landline telephones in the past.  

Although Spain has an average download speed of 126 Mbps (a high figure compared to leading countries like Germany with 87 Mbps or the UK with 74 Mbps), it is true that in certain parts of Spain, the average speed drops to 58.31 Mbps. Therefore, we need to ensure that every corner of Spain has adequate internet service and use the NextGenerationEU funds effectively to incentivize companies and teleworkers to operate from anywhere in Spain with reliable high-speed internet service for their daily operations

In conclusion, Spain has everything in its favor to shift part of its business model towards new markets, particularly in the technology sector, which could constitute a significant portion of its GDP, reducing its reliance on other sectors and diversifying its economic production.

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