Low power costs draw co-location company to Iceland

A new front is being opened in the race to provide inexpensive data center space, and it's located on a former NATO base in Iceland.

A data center co-location company called Verne Global decided that Iceland would be the perfect place for its first facility because of the country's climate, natural resources and network connectivity to the United States and Europe.

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The Icelandic site offers access to geothermal and hydroelectric energy, free cooling every day of the year, and multi-terabit-per-second connectivity to America and Europe. Verne Global, which plans to build efficient data centers throughout the world, is in the middle of construction in Iceland and will be able to serve customers by year-end.

The data center will purchase power for four cents per kilowatt-hour, whereas typical prices in the United States are about  10 cents and can be 20 cents in London, says Tate Cantrell, CTO of Verne Global. By taking advantage of outside air to cool servers in the Iceland data center, Verne Global can further reduce a customer's electric bill.

"There's a considerable savings opportunity here," Cantrell says. "If you look at data centers from a macro level, the percentage of total cost that power represents continues to grow every year. It really is something that customers look at and say 'this [Iceland] is absolutely a great place for data centers.'"

Verne Global, founded in 2006, claims it can save U.S. customers 30% in total co-location costs, and that United Kingdom customers can save 50% to 60%.

Cantrell admits not every application will be appropriate for the Iceland facility, because of latency. A virtual desktop deployment in New York, Boston or northern Europe might work, but perhaps not in California. Cloud computing services, media applications, disaster recovery and archiving could be a fit for the Iceland data center, and businesses with offices in both North America and Europe might have numerous applications they want to locate there, he says.

"All companies have applications that would work in Iceland," Cantrell says. "The only applications which don't work in Iceland are the ones that have to be located very close to the trading floors of the financial exchanges, where you need millisecond to microsecond latencies."

Verne Global says it is 18 milliseconds from London and 36 milliseconds from New York. The data center is being built at the United States Naval Air Station Keflavik, a former NATO facility in southwest Iceland that was closed in 2006 and taken over by the Icelandic government so it could be redeveloped.

When the data center opens this year it will have 48,000 square feet of technical space and a power capacity of 14.4 megawatts. When it is fully built out, Cantrell says it will have up to 280,000 square feet of computing space and as much as 140 megawatts of power.

Verne Global will offer two cooling methods: air cooling and the more expensive water cooling for customers using high-density blades, which might need anywhere from 20 to 60 kilowatts per rack, Cantrell says.

"For customers interested in a typical data center deployment, we have an air solution which requires no additional chillers at any point during the year," because of the Icelandic climate, he says.

The company is nearly finished building the network and power infrastructure, and is working with customers to build out the data center production environment. Verne Global isn't ready to reveal its customers, but Cantrell says it is working with media and financial services companies that generate large amounts of data, among others.

A typical customer configuration would include 8,000 square feet and 2.4 megawatts of power.

Cantrell says Iceland was the right place for Verne Global's first data center, because of the access to green power, free cooling and high-speed network connectivity. Verne Global is already scoping out additional sites, potentially in Asia, the Middle East and Europe.

"We have a database, which we maintain of the optimal site locations," Cantrell says. "It's really a crossover of a number of things, including climate, power and network. … We are very interested in looking at opportunities for server aggregation throughout the world."

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Read more about data center in Network World's Data Center section.

This story, "Low power costs draw co-location company to Iceland" was originally published by Network World.

Copyright © 2010 IDG Communications, Inc.

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