Amazon negotiates multi-billion Euro cloud investment with Italy

AWS is in talks with the Italian Government over a multi-billion-euro investment to expand data centres in Italy as part of the tech giant’s plan to strengthen its European cloud services.

Specifics are still being finalised, according to a Reuters report, with discussions focusing on the size and location of the investment. One source even mentioned that AWS could look to expand its existing Milan data centre or construct a new site from scratch.

Interestingly, when approached, both AWS and the Italian government’s digital transition department declined to comment on the matter. The industry ministry was also unavailable for a statement.

Last year, AWS launched its first cloud region in Italy and announced plans to invest 2 billion euros there over the next ten years. This initiative wasn’t met with surprise by local industries; notable clients like Ferrari and Assicurazioni Generali were already on board.

The recent announcement about the Italian investment follows AWS’s declaration of an even more ambitious plan to invest a massive 15.7 billion euros in Spanish data centres over the next decade. Of this, 2.5 billion euros are earmarked specifically for Spain.

According to one source, although the Italian investment will still amount to billions, it might not reach the scale of their Spanish plans, with no imminent announcement expected.

But Italy isn’t the only European nation on AWS’s radar; they’ve also got plans to invest 7.8 billion euros in Germany through 2040. Let’s not forget their efforts to build infrastructure for providing cloud services to telecom customers, which requires massive resources.

Earlier this month, they scored a significant milestone when Telefonica Deutschland announced plans to move 1 million customers to the AWS cloud.

Last year, AWS even announced plans to store data on servers located within the European Union, in a bid to protect data privacy for government and highly regulated industry customers.

Analysts and executives indicate that many large corporate clients, having paused their cloud spending last year, are now increasing their investments again, particularly driven by the growing interest in artificial intelligence, fueling a rebound in the $270 billion cloud infrastructure market.

In fact, reports indicate that AWS itself grew 17% in the first quarter of this year, exceeding Wall Street’s 15% growth estimate, and hit a $100 billion annual run rate for the first time.

Tech titan AWS, however, is not alone in focusing on Italy. In contrast, Alphabet also signed a cloud agreement with Italy’s largest bank, Intesa Sanpaolo, as far back as 2020, and it invested 1 billion euros in two co-located cloud regions that Intesa relies on.

Not to be outdone, Microsoft announced last year that they would open their first cloud region in Italy as part of a $1.5 billion capital expenditure initiative that the company also disclosed in 2020.

So, when looking at what’s happening with AWS, Microsoft Azure, and Google Cloud, it’s clear that two trends are playing out simultaneously: AI is definitely contributing to growth in the cloud space, while overall cloud spending is also accelerating, as the industry continues to adopt advanced technologies and customers embrace new functionalities.

Check out the upcoming Cloud Transformation Conference, a free virtual event for business and technology leaders to explore the evolving landscape of cloud transformation. Book your free virtual ticket to deep dive into the practicalities and opportunities surrounding cloud adoption. Learn more here.

Tags: AWS, cloud, Digital Transformation