“Data centres represent the foundational infrastructure that drives digital economy and the digital services that we rely upon -individuals & businesses- every day. This pillar of the digital economy is poised for significant growth as the demand for cloud computing, Software-as-a-Service SaaS and AI accelerate,” suggests Kyriacos Kokkinos, Executive Advisor to the Board of CL8, ex-Deputy Minister of Research, Innovation and Digital Policy.
In an exclusive interview with CBN, he goes on to note, “Cyprus’ geostrategic position offers a unique opportunity to become the data hub of the East Mediterranean, acknowledged as the ‘data bridge’ between Europe, Middle East, Asia and North Africa.”
Kokkinos, in addition, shares his expert opinion on ways Cyprus can make itself an even more attractive as a data centre destination while also weighing in on Cyprus’ wider innovation and tech scenes.
As a former Deputy Minister of Research, Innovation & Digital Policy, what is your view of Cyprus’ innovation and tech scenes and their prospects?
I firmly believe that Cyprus has solidly stepped into the digital economy and digital society era. It already exhibits a strong innovation and tech ecosystem, with the tech sector contributing to about 14% of our GDP.
Yet, we do have huge challenges ahead: a shortage of skilled workforce -especially in the cybersecurity and AI domains-, digital gap in terms of digital literacy, the cost of energy limiting our expansion and scalability potential on the data centre space, and many more.
Also, despite the global trend of cloud-first and software, security & applications as-a-service, Cypriot companies are still reluctant to adopt the hosted service approach, insisting on an on-premises approach that comes with higher cost, higher security risks and lower user-experience service level. This is a cultural resistance issue that will eventually fade-away at a gradual pace.
Cyprus is being talked up as an emerging data centre hub, even featuring in government-level discussions in the US, with potential investments on the horizon. But the island still faces obstacles, from high energy costs to grid capacity. What do you consider to be the most persistent bottlenecks, and how much of an economic impact could a competitive local data centre sector realistically deliver?
Data centres represent the foundational infrastructure that drives digital economy and the digital services that we rely upon -individuals & businesses- every day. This pillar of the digital economy is poised for significant growth as the demand for cloud computing, Software-as-a-Service SaaS and AI accelerate. Cyprus’ geostrategic position offers a unique opportunity to become the data hub of the East Mediterranean, acknowledged as the ‘data bridge’ between Europe, Middle East, Asia and North Africa.
Yes, energy cost and infrastructure is the main obstacle for realising this huge opportunity as well as submarine cable connectivity being another consideration that needs to be addressed.
I strongly believe that the government and private sector must work together in a partnership approach to tackle the challenges and realise the huge benefits. We need to collectively - public and private sector- work together for drafting a well-crafted national data centre strategy plan that balances the complex range of challenges/costs with a full view of the benefits and impact -financial, geopolitical, new jobs, social- for data centre development.
Growth of the data centre sector needs to be nourished through appropriate government policies and measures that promote a national game-plan for Cyprus to become the East Med data hub.
Cyprus has signed the EU Declaration on Data Gateway (on 19 March 2021) and has been ‘assigned’ the role of being one of the four Data Gateways, namely the EU-Mediterranean Data Gateway Platform. We just need to deliver on this strategic role, as the geopolitical and economic benefits are indisputable.
Further to the above, when companies decide where to build a new data centre, what matters most, and what are some of the ways Cyprus can make itself an even more attractive prospect?
I believe that you must have a clear ‘game plan’ on what type of data centre you want to be. Cyprus cannot become a hyperscaler host, but certainly there is plenty of room for Cyprus to have edge or co-location Data Centres -for national and regional needs- offering secure, reliable and scalable multiple IT services, business continuity, space rent-out, power, and IT infrastructure to multiple businesses. Smaller, data centres, such as CL8, are located closer to end-users and can offer customised services tailored to client needs, exhibit reduced latency and improved performance for applications requiring rapid data processing.
What are the biggest drivers of growth in the data centre industry?
Four trends are the biggest drivers:
Firstly, the strategic importance of digitisation as a competitive lever does not leave room for falling behind for any organisation or nation. Digitisation is now -more than ever- a highly complex, costly and risky domain. The increasing complexity and cost (skills shortage, complex IT projects and users demanding better services) of maintaining in-house quality IT services drives the need for adopting a cloud and or IT as-a-Service approach through reliable and secure data centres.
The second trend is the growth of AI and high-performance computing. The ‘big-bang’ growth of AI technology is driving the development of computationally intense tools that cannot be on-premise. According to the McKinsey report, ‘The data centre balance’ in August 2025, Gen-AI-led demand for computing power is estimated to be around 40 percent through 2030.
The third trend is accelerated growth of cloud migration and SaaS software-as-a-service. According to same McKinsey report, aata centre demand (in the US) from cloud and other non-gen-AI-related drivers is projected to grow at 16% CAGR through 2030.
Then, fourthly, there are accelerating technology trends. Technology trends such as the Internet of Things and the rollout of 5G and upcoming 6G networks will drive additional technology needs, such as edge computing, hosted by data centres.
As an Executive Advisor to CL8, where do you see the company’s next big growth opportunities?
CL8’s next growth trajectory already started through the implementation of its extrovert strategic mandate for local and regional geographic expansion, its well-crafted portfolio of services tailored to its client and market needs, excellence in customer experience and a go-to-market approach that is founded on partnerships and collaboration with key technology providers.
In addition to the regional expansion strategy, the Cyprus market is already growing, and the digital economy is adopting the hosted service data centre approach. The government’s digital transformation has rightly adopted a ‘cloud-first’ and ‘infrastructure-as-a-service’ IaaS strategy -and there is a multimillion ‘Government Cloud’ tender in the air, as we speak.
CL8 is committed to remain an active player, leading the way towards the modernisation of the IT landscape in the data centre domain.
