This story was written by Keith Dawson for UBM DeusM’s community Web site Business Agility, sponsored by IBM. It is archived here for informational purposes only because the Business Agility site is no more. This material is Copyright 2012 by UBM DeusM.

Data Centers Grow in the Frozen North

The Nordic countries intend to capitalize on their renewable energy and cool climate.

The Nordic countries offer abundant renewable energy and cool climates minimizing the need for air conditioning. Their data center aspirations go way beyond Facebook and Google.

If you need to be agile at Internet scale, worldwide, every millisecond counts. Your cloud presence will be geographically distributed, both for speedier access in all parts of the world and for failover assurance. US-based companies are building data centers in other regions, particularly in Europe.

The US remains the best -- and least risky -- place to locate a data center, according to a new industry survey by Cushman & Wakefield and Hurleypalmerflatt (download the report here in exchange for contact information). The UK and Germany are favored for Europe. But the Nordic countries are rising fast in the rankings because more weight is being given to considerations of green energy production.

Companies building data centers are trying hard to be green, and not only for the favorable PR light in which it casts them. Power is far and away the largest expense for a data center. So they want to be sited where land and power are cheap, where financial incentives are available, and ideally where cooling is less of an issue. All of the above describes well the developed countries nearest to the Arctic Circle.

The New York Times has a review of the fast-developing data-center scene in Iceland, Sweden, Finland, and Norway, centered on a project under construction for Facebook in Lulea, Sweden.

When it is completed, Facebook's European data center will have 3 buildings totaling nearly a million square feet (85,000 square meters). It will siphon enough power from the mighty Lule river to energize 120,000 American homes. The area around Lulea can support another ten data centers the size of Facebook's, which collectively would draw power sufficient to light Los Angeles. Currently, generators on the Lule produce twice the power of Hoover Dam, around 4,000 megawatts, and show a 50 percent surplus beyond the needs of the mining and manufacturing operations in the area.

The Times summarizes the recent and current building activity in the Nordics: "In addition to Facebook, which will spend as much as $750 million on the center, Google has built a ... $265 million data facility in Hamina, Finland; Verne Global is investing $700 million in its center in Iceland; and Green Mountain Data is building a facility worth... $175 million in Norway." These facilities join about 250 data centers in Europe, set to expand by another 50 over the next few years.

Lulea hopes to wrest more value from its data-center investment than the construction jobs and the 40 or 50 ongoing Facebook positions in what will be a nearly lights-out operation. "The ambition in Lulea is to create a hub where data center operators collaborate with students and professors at the [Lulea University of Technology]," the Times reports, "creating an environment for research and development in areas like energy efficient computing and smart grids."

The Times quotes a Forrester analyst, Rachel Dines, being dubious about whether data centers will ever provide lasting benefit to the regions that sponsor them. "I'm not sure I've seen a lot of evidence that it will bring the benefits countries think it will."

But the far northern data centers will certainly bring benefits of agility, greenness, and lowered energy costs to those who build and operate them, and by extension to those who make use of the clouds hosted there.