• Madrid Investment Attraction

Robert Assink (Interxion): “It is now a fact that Madrid is a key connectivity hub in southern Europe. The concentration of data centers in Madrid attracts many companies that provide digital services”

Robert Assink is the general manager in Spain of the data center company Interxion. Founded in 1998 in the Netherlands, Interxion arrived in Spain in 2000 and integrated with the American Digital Realty in 2020. In Madrid, Interxion has four centers. Mr. Assink has run the firm in Spain since its inception and knows the sector inside out.

“There is a relationship between digitization and sustainability: the more an economy is digitized, the less CO2 emissions per capita it has,” he advances, with data from a study prepared by Afi. In the rest of the interview, Mr. Assink analyses the data center sector and Madrid’s role as a digital hub in southern Europe.

M.I.A.: What is Interxion and how does it fit into the structure of Digital Realty?

R.A.: Interxion is the company that we started off with. We began in Madrid in the year 2000. But just when the pandemic began, we joined the American company Digital Realty. In Spain they still know us as Interxion, but we are the same company. We were born as a result of the liberalization of the telecommunications market. Every country had its Telefónica or British Telecom: a company with a monopoly on the telecommunications network. By liberalizing the sector (a legal imperative), these monopolies were obliged to allow their networks to interconnect with new competitors, with companies that were created at the time or that entered the market.

These state-owned companies, the incumbents, used to quibble about administrative and operational issues, slowing everything down. They did not want others to steal their business. It was a tedious process. For instance, a new operator had to physically enter the facilities of Telefonica, a monopoly at the time, to connect its cable to the network. It wasn’t a transparent process, and it wasn’t fast, so the neutral data center industry was born. We were physical places that made it easy for all the operators to connect with each other and with Telefónica. A kind of airport where passengers landed with one airline and left with another. Now, telecommunications have been replaced by the internet.

M.I.A.: How has your business evolved in Madrid? How many data centers do you already have?

R.A.: In Madrid we have four data centers. A few months ago, we opened the fourth. They are all in the San Blas area, which has become the best-connected neighborhood with the largest number of networks. Indeed, it’s our hub. The reason is that in its day there was a snowball effect. This activity requires access to great electrical power and infrastructure underground. In its day, there was only access via Telefónica and one of its main nodes was here. We sought proximity. Forty years ago, San Blas was a heavy industry neighborhood. It underwent a rezoning process and the electrical network that fed that industry was maintained.

M.I.A.: What is the San Blas hub like and how has it evolved since the arrival of Interxion more than twenty years ago?

R.A.: First there was Telefónica. Then we established ourselves, along with another competitor and other smaller companies that required network access. Fifteen years ago, we did a study on the neighborhood, and we counted more than two hundred companies dedicated to the digital sector in areas such as web design, hosting, etc. We decided to unite to defend our interests and created Silicon Alley Madrid, which is similar to an association of technology companies in Manhattan that has established itself as the urban version of Silicon Valley. Our effect has been similar.

When Madrid presented its bid to host the Olympic Games we campaigned. We were part of the technological infrastructure proposal that could provide digital services to the Olympic city. The association has evolved, and since 2018 it has grown. We launched the Madrid Digital Hub concept, based on a study in which we made certain predictions about Madrid and its place on the world connectivity map. It is now a fact that Madrid is a key connectivity hub in southern Europe. The concentration of data attracts many companies that provide digital services.

M.I.A.: Who are the main customers of the data center business?

R.A.: Social networks, games, streaming platforms… All kinds of digital services for citizens and companies. And from 2020, all the large companies that provide digital services in the public cloud. Amazon, Microsoft, Google, Oracle and IBM have established their bases for connectivity and access to cloud platforms in Madrid. The submarine cables that interconnect Europe and the United States have also found a shorter and faster route in Spain. They enter through Lisbon or Bilbao, pass through Madrid and carry traffic to the rest of Europe. Marseille is the entry point in Europe for these cables, which exit through the Suez Canal. This digital highway is the fastest and largest in the world. Most of the traffic passes through Madrid. It can be compared to Barajas airport. It is a true digital interconnection hub.

M.I.A.: How many people work at Interxion?

R.A.: We are not a very staff-intensive company because the business is very digitalised. We are the landlord of other digital companies. In Madrid we are only sixty people. Now, with the fourth data center just getting started, we’re going to hire two or three more people. But we create a great multiplier effect with what we generate.  Every million we invest is multiplied by twelve in terms of the contribution to the GDP of the region. That’s because we facilitate the installation of digital services companies that then hire a lot of staff. We plant the seed and others flourish.

M.I.A.: And what kind of workers are you looking for? Is it easy for you to find them?

R.A.: We are a data centers business, but we are not focused on just data specialists. Ours is a physical world where we make it easy for others to host and distribute data. Our staff is specialized in keeping those critical facilities running. They are electromechanical technicians, physical security technicians… Right now, there is competition in the market. Most young people opt for digital careers like software development, which gets more attention in the media. But few people prepare to be an electrician. There aren’t enough of them, and companies like Google, Microsoft and Facebook are competing to hire them. We are like a training facility.

 M.I.A.: Why are data centers an interesting business for Madrid? What can they bring to the city?

R.A.: Many governments have understood the importance of the sector and are interested in attracting investment to create this type of infrastructure. During the pandemic we became more well known among the administration in Spain. For them, we were an essential service provider. Thanks to our business, teleworking was feasible. And thanks to the interconnection of networks, companies and applications can distribute content to thousands of homes in Spain.

M.I.A.: What challenges does the sector face?

R.A.: The number one problem is access to electrical power. A single building can require the power of a city of 100,000 inhabitants. And for the electricity sector it is a new challenge, because in the planning of its network they had not taken into account the demand for this type of service. There is a mismatch in the planning cycles: data centers take two years from when we approve the investment and power grid cycles last five years. Companies announce their needs when the electrical network cycle has already passed. But we are familiar with those cycles, and we plan growth ahead of time.

Land, within the city, can be a complicated issue. But it’s not that problematic for us. The bureaucratic processes are tedious, because we have to rely on the municipal district, with the Industry department of the Community, with the Ministry… and the Environment Ministry also has a say, because the cables cannot pass through all the neighborhoods. It requires patience and knowing who the person in charge is to speed things up.

M.I.A.: As a digital hub, with which cities does Madrid compete?

R.A.: In the short term, competition is measured in terms of who attracts the money first. But in the medium and long term it is not a question of competition, but of necessity. London’s Heathrow airport does not compete with Madrid-Barajas because their customer bases are different. The main point to bear in mind when creating these critical infrastructures is the demand for digital services. A bigger economy requires more digital infrastructure than a small one. Madrid’s geographical location serves the entire Iberian Peninsula better than anywhere else, with lower costs and higher quality and speed of service.

M.I.A.: What kind of relationship do you have with the Madrid administrations? How do you think they could help you?

R. A.: We talk regularly with the public administrations. Two years ago, we created Spain DC (Data Centers), an association that promotes collaborative initiatives. The Community of Madrid has taken this on board and has created a one-stop shop to serve the data center sector and encourage investment. It was a request from the sector.