Amazon eyes old Italian power stations to build $1bn data centres – report
Potential build “follows the herd mentality” as cloud players copy each other’s’ moves, analysts say.
Global cloud player Amazon is said to be in talks with Italian electricity and gas provider Enel to convert old power stations into data centres.
According to Reuters, sources familiar with the matter said AWS could spend up to $1.06bn in the build of three to five sites in the north of the country.
An Enel spokeswoman told Reuters contacts between the two companies have been made. Sources said a deal could be coming to fruition in the coming months.
Speaking to the Italian parliament last week, Paola De Micheli, the country’s Industry Ministry undersecretary, said AWS was eyeing up to three Enel plants.
De Micheli said some of the facilities being considered are located in the Piedmont region, which sits at the foot of the Alps. The region of Piacenza has also been mentioned.
She said the Trino Vercellese station in Piedmont was one of the three/five sought by AWS and that a potential deal between Enel and the cloud company could also see Enel supplying energy to AWS’ data centres.
In Piacenza, AWS could take over one of Enel’s main power stations in La Casella, where more than 1,000 Amazon staff work in the company’s distribution centre.
Enel, the largest European utility provider in terms of capacity, is currently going through a phase of consolidation and is looking into selling 23 of its facilities in Italy (with a total power capacity of 13GW) as it seeks expansion in other markets, especially in emerging economies.
The company is shifting its roadmap towards renewable energy and plans to add up to 6.7GW of power generated by green sources until 2019.
Steve Wallage, MD at BroadGroup Consulting told Data Economy: “This news follow recent trends of cloud players developing facilities in major cities in Europe, and not just low-cost locations.”
Wallage also said that the potential move by AWS matches the “follow the herd mentality” as cloud players copy each other’s’ moves, and further to IBM SoftLayer investment in Italy
He said: “It also shows the opportunistic nature of the cloud players, with an old power station a potentially ideal location, not just because of the diverse power feeds, but also security and often telecoms.
“More broadly, Italy, and particularly Milan, are becoming much more dynamic as a data centre market.”
This new twist in the Italian market has also been highlighted by Wallage in BroadGroup’s most recent report, ‘Data Centres Europe 7’.
The report highlights the uptake within the Italian market especially following investments from players like IBM SoftLayer and Vodafone.
The data centre market is however lagging behind other markets like the Netherlands, the UK, France, Spain or Germany in terms of available hosting space. The Italian market is expected to reach around 164,000 sqm of data centre hosting space by the end of 2016.
Elsewhere, AWS announced back in October it was going to expand its data centre footprint to Paris, in addition to its other two European regions in Frankfurt and Dublin.
The company is set to open a UK data centre cloud region soon as well, in addition to other regions which are being expanded and/or implemented in Canada, China, and the USA, in Ohio.
Global AWS revenues have in Q3 2016 topped $3.2bn. In the first three quarters of the year, the company has gained $8.6bn in revenues, already $800m more than the whole of 2015 which accounted for $7.8bn.
AWS’ expansion of its data centre fleet also matches Cisco’s predictions that the number of hyperscale data centres are set to nearly double by 2020.
Thomas Barnett, Jr., Director, Cisco Systems’ SP Thought Leadership at Worldwide Service Provider Marketing Group, recently wrote in a blog: “Today, there are 24 hyperscale cloud operators (…).
“Hyperscale data centres will grow from 259 at the end of 2015 to 485 by 2020. They will also house 47% of all installed data centre servers by 2020.”
AWS and Enel were both unavailable for comment when approached by Data Economy.