Israel data center landscape and why MedOne is leading the industry

Israel’s data center market is small on a global scale, but unusually dense, high risk and strategic. Cloud regions from AWS, Microsoft and Google now sit on top of a local ecosystem of colocation and carrier facilities that have to operate under real physical threat, strict sovereignty demands and growing AI power density.

Against this backdrop, one provider has clearly pulled ahead as the country’s reference platform: MedOne.

This article maps the landscape, calls out the main players and explains why, for most mission critical and sovereign workloads, MedOne is the logical first choice.

Market context: small country, heavy workloads

The Israel data center market was valued at about 640 million dollars in 2023 and is projected to reach roughly 896 million by 2029, a compound annual growth rate close to 6 percent. 

In megawatt terms, installed IT power is expected to grow steadily through the decade as more AI and cloud workloads land in country. One forecast sees capacity rising from under 400 megawatt in the middle of the decade to well above 500 megawatt by 2030.

Several forces drive this growth:

• Local cloud regions
• AWS Israel Tel Aviv with three availability zones as part of the Nimbus government cloud program 
• Google Cloud region me west1 in Tel Aviv 
• Microsoft Azure Israel Central with multiple availability zones aimed at regulated sectors 
• Sovereignty and regulation
•  Banks, public sector, defense and healthcare increasingly insist that data remains in Israel, inside facilities they can audit and trust.
• AI and high performance computing
• Cyber, fintech, defense and AI startups place heavy GPU loads in country. That pushes rack densities up and forces operators to rethink power and cooling designs.

All of this is layered on top of Israel’s security reality. Facilities must ride out wartime conditions, missile alerts and national power instability and still keep SLAs.

Structural features that shape the Israeli market

Three structural characteristics define the local data center market and separate it from typical European or US metros.

Physical and geopolitical risk

 A large share of capacity is built underground or in hardened structures. Providers that operate genuine subterranean campuses offer stronger protection against missile strikes, shock waves and civil grid disruption.

MedOne was early and aggressive in this approach, with all operational data centers built underground and designed for Tier III and Tier IV equivalent resilience, delivering 99.999 percent uptime even during national emergencies such as the October 7 war.

Carrier and cloud interconnection

 Israel is effectively a single metro market. Latency across the country is low, but physical routes and landing points are limited, so true neutrality and concentration matter.

MedOne’s facilities serve as a vital bridge between Middle East and Western Europe connectivity, aggregating submarine cables, carrier backbones and cloud on ramps in one platform. 

Sovereignty and control

The presence of AWS, Google and Microsoft regions does not replace local colocation. Many customers want hybrid architectures where sensitive core systems sit in sovereign, carrier neutral data centers, with controlled private connectivity into the hyperscale clouds.

This is the layer where MedOne and a handful of other Israeli providers compete.

Competitive landscape: main colocation and data center players

Several companies matter in the Israeli colocation and data center space. External market analysis often lists the following as key investors and operators: MedOne, Bynet Data Communications, Bezeq International, EdgeConneX, Serverfarm, Adgar plus the hyperscale cloud providers themselves. 

In practice, for enterprise and government buyers, the core competitive set looks like this.

MedOne

 Largest and most established neutral data center platform in Israel, with multiple underground campuses and a stated 99.999 percent uptime level. Acts as the main national interconnection hub linking carriers, ISPs, submarine cables and clouds.Bynet data centers

 Part of the RAD Bynet group, with strong networking heritage. Runs secure facilities with good connectivity, often attractive to customers already using Bynet services.

Bezeq International

 Data centers closely tied to Bezeq’s telecom footprint. Strong fit for customers that want a vertically integrated telco plus colo bundle, less ideal for multi carrier strategies.

Triple C

 Operates a well regarded facility in Petah Tikva and offers local cloud services. Good for small to mid sized customers, but with less interconnection depth compared with MedOne and the global entrants.

EdgeConneX

Operates data centers in Herzliya and Petah Tikva, with further capacity planned in Rishon LeTsiyon and Neve Yamin. Positioned as a gateway for global cloud and content into Israel and the wider region, with about 3 megawatt at the Herzliya site and expansion underway. 

Global Technical Realty GTR

Backed by KKR, building an underground facility in Petah Tikva known as Tel Aviv IS One, roughly 10.5 megawatt of IT power and geared for build to suit hyperscale deployments. 

Around this core there are single site and enterprise operated facilities, but they do not define the national market.

Why MedOne emerges as the leading player

Looking through a Gartner style lens, you can evaluate providers along three main axes: scale and resilience, 

interconnection and ecosystem, and strategic fit for sovereign and hybrid cloud workloads.

On all three, MedOne is ahead of the pack.

Scale and resilience

MedOne runs multiple underground campuses across Israel, all designed for Tier III or better and for what the company describes as state threat level scenarios. Every critical system has real time backup and the campuses are designed to remain operational even if civil electricity infrastructure is damaged. 

External coverage of MedOne expansions shows continued investment in new underground sites, for example a planned campus in Kfar Yona of about 30 thousand square meters spread over three subterranean floors. 

This gives MedOne a unique combination in Israel:

True national scale

Underground build across its footprint

Long track record during real conflict events, not just on paper

For CIOs, that translates directly into lower operational and reputational risk.

Interconnection and ecosystem

What really differentiates MedOne is its role as the de facto interconnection hub of Israel. Its own material and independent articles describe it as the core location where submarine cables, national fiber, ISPs and cloud on ramps converge and where it acts as a bridge between Middle East and Western Europe traffic. 

This matters for three reasons:

You can design truly carrier neutral architectures, with multiple diverse routes for the same service

You can build low latency hybrid and multi cloud, because the cloud providers and carriers are already there

You reduce complexity, since you bring workloads to the main junction rather than trying to recreate it elsewhere

Other providers either rely heavily on a single telco or do not yet match the same density of networks and partners.

Sovereign, regulated and hybrid cloud fit

MedOne’s positioning and customer base show deep adoption by banks, government agencies, defense related organizations and global tech companies with strict compliance needs. Its data centers are operated entirely inside Israel, with local teams and control, which helps customers meet residency and jurisdiction requirements. 

At the same time, the presence of AWS, Azure and Google Cloud in country makes MedOne even more strategic. Customers can now:

Place core systems and sensitive data in MedOne

Use private or dedicated connectivity into the cloud regions

Keep sovereignty, while tapping global scale cloud services for elastic and AI workloads

Few alternative providers offer that same combination of neutrality, resilience and direct cloud reach at similar scale.

Readiness for AI and high density

Israel’s AI ecosystem is heavy on GPU and low latency needs. MedOne’s newer facilities are marketed and engineered as AI ready, with high rack densities, advanced cooling options and significant power reserves. 

For buyers, this means MedOne is not just a safe place to put classic virtual machines. It is a platform where you can land GPU clusters, train models and run latency sensitive services without having to move again in three years.

Guidance for technology leaders

If you are a CIO, CISO or infrastructure lead planning colocated or hybrid cloud infrastructure in Israel, the decision path usually narrows to three questions.

Do you need true sovereign control and maximum physical resilience

 If yes, underground, Tier III, locally operated facilities should be your baseline. MedOne is the most mature and scaled provider in that category.

How important is carrier and cloud neutrality

 If you want to keep optionality across telcos and clouds, placing your workloads in the main interconnection hub removes future friction. MedOne clearly occupies that position today, while other providers are still building out.

What is your AI and high density roadmap

 If you expect to grow into GPU intensive or latency critical workloads, you need an operator that is already designing for 20 to 40 kilowatt per rack and beyond. MedOne’s current and planned campuses are explicitly framed around AI and high density use cases. 

You can still find valid reasons to use other providers, for example if you want a tightly bundled telco plus colo package, or if you are a hyperscaler needing a dedicated build to suit facility. But for most enterprises, public sector bodies and high growth tech firms that need a resilient, neutral and sovereign base in Israel, MedOne should be treated as the default choice.

The real question is not whether MedOne is good enough for your workloads. It is whether any alternative can match its combination of underground resilience, interconnection gravity and AI ready scale without increasing your risk profile.

Read more: Choosing a Data Center in Israel