Poland has emerged as one of the top destinations for data center investment and colocation in Europe. With its strategic location, robust infrastructure, highly skilled workforce, and business friendly policies, the country is attracting global hyperscale providers and enterprises to set up their data centers. Let’s take a detailed look at some of the major factors that are driving the growth of Poland’s data center market.
Strategic Location
Poland’s central location in Europe makes it an ideal spot for Data Centers that need to serve the whole European continent. Being part of the European Union gives additional advantages related to trade agreements and policies. Warsaw, the capital city of Poland, is located at the center of Europe which enables low latency connectivity to major population and economic centers across Europe, Western Asia, North Africa and the Middle East. This strategic location allows data centers in Poland to deliver optimized performance for a large customer base across the region.
Developed Infrastructure
Poland has invested heavily in developing state-of-the-art digital and physical infrastructure. It has a robust fiber connectivity with international submarine cables landing on its coast as well as extensive terrestrial networks criss-crossing the country. This delivers high-bandwidth and low-latency connections within Poland and to the rest of Europe. Reliable power infrastructure in the form of multiple redundant power grids and substations also ensure robust and consistent power supply needed by data centers. Well-developed road and railway networks allow seamless movement of equipment and supplies. All these critical infrastructural aspects make Poland a viable large-scale data center development destination.
Policy Support
The Polish government recognizes data centers as critical digital infrastructure and offers supportive regulatory policies to attract investments. It provides corporate tax incentives, subsidies for job creation, and special economic zone benefits for data center developments. Obtaining construction, power and connectivity approvals is a streamlined process. Power costs are lower compared to Western European nations. Continued government support through investment promotion agencies like Polish Investment & Trade Agency also assists foreign investors. These business friendly policies create a stable and encouraging environment for investors.
Availability of Skilled Talent
The availability of skilled engineering and IT talent has been a big draw for global technology companies to establish offices and facilities in Poland. With over 38 million population and a large skilled expatriate workforce, Poland produces over 50,000 STEM graduates every year from top universities. Polish talents are fluent in multiple European languages which make international collaboration easier. Training institutions like the Warsaw University of Technology are constantly upgrading courses to match industry requirements. This educated talent pool satisfying both operations and technical skills needs of the data center industry.
Low Total Cost of Ownership
While Poland offers world-class infrastructure and excellent connectivity at par with Western European nations, data center development and operations enjoy significantly lower total cost. Land and construction costs are 30-40% lower than Germany, the Netherlands or UK. Power rates are 20-30% lower than major Western European markets providing good annual operational cost savings. Cooling is also cheaper due to temperate climate. Skilled workforce salaries are 25-30% lower than other major data center hubs. All these factors translate to an optimized total cost of ownership for data centers which is a major positive for investors.
Tax Incentives for Data Center Investments
Poland offers several tax incentives for companies investing in data center infrastructure developments. The following are some of the key incentives:
– Corporate Income Tax (CIT) Rate: Standard 19% CIT can be reduced to 15% for data center projects creating large number of jobs.
– Accelerated Depreciation: Investments in IT infrastructure, cooling systems, etc. can be depreciated over 3 years versus standard 5-8 years to reduce taxable income in initial years.
– Real Estate Tax Exemption: Properties belonging to data centers are exempt from real estate tax for 10 years after receiving necessary permits.
– R&D Tax Relief: Additional tax relief is available for investments in activities related to data center technologies and innovations in Poland.
– Employment Tax Relief: Companies hiring local talent get payroll tax holidays for new jobs created along with cash grants based on job count and location.
These lucrative tax benefits help lower operational costs and boost investment returns for data center developers.
Overall, factors such as the strategic location connecting East & West, robust physical and digital infrastructure, skilled engineering talent pool, tax incentives for greenfield investments, low operational costs have positioned Poland as a top data center market in Europe. Global cloud giants like Google, Microsoft and AWS already have a presence with multiple large facilities. Leading colocation providers like Equinix, Digital Realty and Telehouse are growing their Polish footprint. Entire cities in central Poland are becoming dedicated data center hubs. More investments are expected to pour in the coming years as businesses leverage Poland for their EU and global digital infrastructure needs.
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.