Therefore, one element that should not be overlooked when evaluating a company's location strategy is the quality and density of digital infrastructure in potential locations. The continued growth of new digital hubs is offering companies greater choices for new sites, as well as for redundancy options. Where previously the choice of headquarters was limited to a few established centers, new locations are now emerging, demonstrating a range of economic, infrastructural, and geographical advantages that can have a positive impact not only on the supply chain and digital strategy, but also on a company's sustainability. One such location is the Iberian Peninsula.

For European companies, and for global companies seeking a European footprint, there has been a trend toward congregating in the large, historical digital hubs of Frankfurt, London, Amsterdam, and Paris (the FLAP markets) to access their digital ecosystems. Such a digital hub brings together a dense landscape of data centers, clouds, and networks, combined with the interconnection services of a number of Internet Exchanges (IXs), to enable optimal conditions for digital work and life. By aggregating infrastructure, such a hub helps companies access the networks and services they need with the best possible performance. Today, we see new options emerging: Digital hubs like Madrid, Lisbon, and Barcelona offer not only the advantages of their own locations but also the combined power and density of the entire Iberian Peninsula.

Optimized connectivity with the entire world.
As demonstrated by the DE-CIX studies "The Iberian Peninsula: A Next-Generation Regional Mega Hub" and "Portugal: A Global Interconnection Hub, A Gateway to Europe, A Gateway to the World," Iberia can be considered practically the center of the digital world. Located on the shores of the Atlantic and the Mediterranean, it boasts abundant submarine cable infrastructure connecting the five continents with unsurpassed latency. The peninsula has 35 international submarine cable systems and 20 cable landing stations (CLS). Global latencies from Lisbon attest to its centrality, with 16 milliseconds (ms) of latency to Casablanca, 40ms to Lagos, 60ms to Washington DC, 60ms to Fortaleza, 70ms to Dubai, and 140ms to Singapore. This allows for the optimization of global traffic flows, with Iberia well-positioned as an alternative route for international data traffic from north to south, south to south, and east to west.

Figure 1: The Iberian regional megahub: connecting countries and continents

Business Advantages of the Iberian Peninsula:
Aside from its role in global data flows, Iberia is an attractive market in its own right, with a population of nearly 60 million and leading levels of 5G deployment to support modern use cases. The peninsula is home to a distributed data center market comprising over 100 data centers, with many more in the planning stages. Overland connectivity crisscrosses Iberia, linking it to the rest of Europe. The robust higher education sector ensures the influx of new talent to meet the ever-increasing global demand for skilled workers, and the mild climate and lifestyle contribute to their retention. The peninsula boasts an extensive high-speed rail network, multiple seaports, and Madrid-Barajas Airport can handle up to 70 million passengers annually. It is a regional mega-hub, not only for data flows but for all business needs.
Cloud service providers have long understood the appeal of the Iberian Peninsula, with huge investments poured into the region in recent years and announcements of further multi-million-dollar investments in 2024. And if we look just at Madrid, we can see why the cloud has felt the need to establish itself in the region: Madrid is home to the headquarters of most of Spain's largest companies, with 65% of Spanish multinationals having their main base in the city, along with more than 7,000 foreign companies.

The city is one of the top five in Europe with the most operational headquarters of multinational companies listed on the Fortune Global 500. Madrid also ranks fifth in Europe among leading cities in terms of economic output, diversity, and growth potential, making it a captivating hub for business and investment. Since 2016, Madrid has experienced remarkable GDP growth of 23.24%, reaching €261.7 billion in 2023.

The Iberian Peninsula's Regional Megahub
: What makes the Iberian Peninsula so unique? It not only boasts a global hub for submarine cables, but also highly distributed onshore infrastructure. Alongside the Madrid, Lisbon, and Barcelona hubs, other infrastructure markets that also play a role in shaping the Iberian regional megahub include Bilbao, Valencia, Málaga, the Aragon region, Porto, and Sines. The combination of strengths in this dynamic cluster of hubs and infrastructure markets makes Iberia a top choice for companies seeking new headquarters and branch locations. With latency of approximately 17 ms from Madrid to Paris, 14 ms from Barcelona to Rome, and 18 ms from Barcelona to Geneva, and around 30 ms to destinations in Germany, according to https://wondernetwork.com/pings, Iberia can also be strategically positioned for network operators to enhance connectivity resilience for Central and Southern Europe. In this case, a location in the Iberian Peninsula can complement locations in FLAP markets to ensure the highest level of resilience.

The best connectivity to enterprise application networks and the cloud

Figure 2: The combined strength of the Iberian digital ecosystem

The Iberian Peninsula also boasts a robust distributed interconnection market. A total of 13 IXs—most of them in Madrid, Lisbon, and Barcelona—enable the optimization of traffic flows and direct interconnection with local, regional, and international networks, while also providing opportunities to meet the growing demand for redundancy at the IX level. Aggregated ASNs connected to these IXs have multiplied since 2016, growing by approximately 1200% and reflecting the region's increasing importance to network operators.
The interconnected ecosystem of DE-CIX IXs in Iberia, as well as in Marseille, in southern France, provides the foundation for excellent connectivity throughout the region. The company's IXs in Southern Europe provide seamless interconnection through the regional mega-hub and through DE-CIX's IXs in Central and Northern Europe, across the Atlantic to its North American IXs, as well as south to the African hubs and east to the Middle Eastern and Asian hubs operated by DE-CIX. These IXs enable businesses to achieve optimal connectivity to local cloud and application network regions, as well as to cloud service providers and network operators not yet present in Iberia.

How can Iberia support sustainability strategies?
The region also offers abundant opportunities to power data centers with renewable energy, largely from hydroelectric, solar photovoltaic, and wind power generation. Spain and Portugal are leaders in regenerative energy production, and a number of data center operators and colocation providers are leveraging the favorable climate to power their data centers. Several colocation service providers in Spain and Portugal have signed power purchase agreements to power their data centers with 100% renewable energy. In the Portuguese city of Sines, for example, what will be Europe's largest renewable energy data center complex, Start Campus SINES, is under construction. Furthermore, major on-the-ground cloud players in Iberia are sourcing renewable energy from the peninsula. We see great potential for Iberia to become a carbon-free AI hub for Europe, taking advantage of the abundant space, relatively low land costs, and renewable energy generation capabilities.

Companies are taking advantage of Iberia's advantages.
In short, companies are relocating to the Iberian Peninsula, taking advantage of the benefits it offers. The Iberian Peninsula is unique in the world for its infrastructure and geographical advantages. It is not simply a landmass bordering the Atlantic and the Mediterranean, but an interconnected network of individual infrastructure centers and markets, centered around the strong digital hub of Madrid. For companies seeking greater efficiency, control over their global data flows, and ensuring connectivity resilience, Iberia should be at the top of the list of key locations in European and global localization strategies.

By Theresa Bobis, Regional Director for Southern Europe, DE-CIX