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The rise of secondary data centre markets: Insights from Datacloud Global Congress 2024

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By Russell Poole

The recent Datacloud Global Congress 2024 in Cannes brought together 3,200 senior decision-makers and experts in the digital infrastructure space.

Among the attendees was Apto’s management team. The event was a fantastic opportunity for us to reconnect with our industry friends, make new connections and gain valuable insights from leading experts in the field.

I had the opportunity to join a panel discussion with other experts on the shifting dynamics from primary to secondary data centre markets. The insights and exchanges during this panel inspired me to collect my thoughts into this article.

The shift from FLAP-D to secondary markets

The traditional FLAP-D markets – Frankfurt, London, Amsterdam, Paris and Dublin – have long been the epicentres of data centre activity in Europe. These cities are favoured for their strategic locations, robust infrastructure, proximity to networks and trading hubs, and favourable environmental conditions.

However, recent trends indicate a pivot towards secondary markets driven by several critical factors:

  • Saturation and high costs: The primary markets are experiencing saturation, leading to skyrocketing real estate and energy costs. This makes it increasingly challenging for new entrants and even established players to expand their footprints. The demand for data centres continues to grow, but the available resources in these traditional hubs are becoming scarce.
  • Regulatory and power constraints: Stricter regulations and limitations on available power are significant barriers in traditional hubs.  Municipal sentiment in some of the primary markets is often not conducive to the deployment of new data centres

The emergence of secondary markets

Secondary markets such as Madrid, Milan and Warsaw are rapidly emerging as attractive alternatives. These locations offer more availability of land and power, coupled with lower operational costs and more favourable regulatory environments.

As we explored these opportunities in the discussion, we shed light on the advantages and potential of these markets, which I dive into here:

Definitions and dynamics

  • The term ‘emerging markets’ can be misleading when discussing cities like Milan, Madrid and Warsaw, as these cities are already well-established as data centre hubs with significant infrastructure and investment.
  • The preferred term ‘secondary markets’ more accurately captures their current status and untapped potential.
  • Secondary markets can be in different countries, but also second or third cities to those larger well established markets, Berlin to Frankfurt for example.
  • These markets are not newcomers but rather strategic locations that offer fresh opportunities for growth beyond the saturated primary markets.

AI and latency

  • One of the compelling advantages of secondary markets is their suitability for AI training sites, which are typically less latency-sensitive than other types of data centres.
  • AI can be resource-intensive but does not necessarily require proximity to major  hubs.
  • This allows for greater flexibility in site selection, where land and power are more abundant.
  • Additionally, secondary markets can more easily source carbon-free power, aligning with the industry’s growing emphasis on sustainability.

Investment and regeneration

  • Secondary markets are often eager to attract investment, especially in regions where traditional manufacturing has declined.
  • This creates a unique opportunity to leverage powered land options with excellent transport links, ideal for data centre use.
  • These areas are not only ready for regeneration projects but actively welcome them, fostering a symbiotic relationship between data centre developers and local economies.
  • The influx of investment can spur economic growth, job creation and infrastructure development, revitalising communities and creating long-term value.

Sustainability and community impact

  • As we consider expansion into secondary markets, sustainability and community engagement are paramount.
  • Planning for future scale with sustainable supply chains, local skills development, and carbon-free energy is essential.
  • This holistic approach ensures that the growth of data centres benefits both the industry and the local communities.
  • By prioritising sustainable practices and actively involving local stakeholders, we can mitigate the environmental impact of data centres and support the development of resilient, thriving communities.

Enhanced strategic flexibility

  • Secondary markets offer enhanced strategic flexibility that primary markets simply cannot match.
  • With less competition for resources such as land and power, companies can secure larger sites at more competitive prices.
  • This flexibility extends to regulatory environments as well, with many secondary markets offering more favourable conditions and incentives for data centre development.
  • This can significantly reduce the time and cost associated with setting up new facilities, accelerating time-to-market and providing a competitive edge.

Future-proofing data centre operations

  • Investing in secondary markets also represents a forward-thinking strategy to future-proof data centre operations.
  • As primary markets continue to face saturation and regulatory constraints, having a foothold in secondary markets ensures that companies are well-positioned to adapt to changing conditions and demands.
  • This diversified approach can help mitigate risks associated with over-reliance on a few key locations and provides a broader base for scaling operations in response to global trends.

Apto’s role in navigating new markets

Apto stands out in this evolving landscape by partnering with cloud service providers looking to expand in these secondary markets. Our value proposition is clear: we enable our partners to fast-track their entry into high-growth regions, securing sites, permits and power cost-effectively and on time.

We offer several unique advantages:

  • Expertise and Track Record: Our team has a strong track record in building and delivering premier data centres in sought-after locations. This expertise is invaluable as we navigate the complexities of new markets.
  • Financial Backing and Real Estate Access: We provide robust financial backing and exclusive access to an extensive European real estate portfolio, positioning us uniquely to offer unparalleled opportunities to our partners. This ensures that our projects are well-supported from inception to completion.
  • Focus on Secondary Markets: By concentrating on secondary markets, we offer a strategic advantage where power and land are more readily available, and operational costs are lower. This focus allows us to provide our partners with a clear-cut economic advantage in their expansion efforts.


The Datacloud Global Congress 2024 highlighted a critical shift in the data centre industry from traditional FLAP-D markets to promising secondary markets. As these new hubs develop, they present significant opportunities for companies ready to embrace change and invest strategically.

Apto is poised to lead this transformation, helping cloud service providers navigate these emerging landscapes, ensuring they stay ahead in support of the next wave of the digital economy.

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