Data Center Customers Warming to Iceland

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Verne Global CEO Jeff Monroe calls its Iceland-based data center “the ultimate energy hedge” for its ability to provide long-term price visibility through 12 to 20-year contracts. (Photo: Colleen Miller)

KEFLAVIK, Iceland - Data center customers are warming up to Iceland. It’s been five years since Verne Global announced plans to build a data center business in Iceland, which offers nearly ideal scenarios for power and cooling servers. The company’s facility on a former NATO base is now filling with customers, with a boost from cloud hosting provider Datapipe.

The latest arrival is RMS, which specializes in modeling catastrophe risk for the insurance industry. RMS will use Datapipe’s Stratosphere high-performance cloud to support RMS(one), a new service that combines “big data” analysis and a cloud delivery model to provide insurers with real-time information on the risks posed by natural disasters.

The computing and storage horsepower RMS is housing in Iceland will make it easier for insurers to quickly assess looming disasters. An example: the approach of a hurricane, in which risk models shift along with the path of the storm, in which case the RMS app will need to quickly scale its capacity as many clients simultaneously seek to update their projections.

“Datapipe’s Stratosphere HPC green cloud platform delivers on-demand scalability combined with the power efficiencies of the Verne Global facility,”
said Robb Allen, CEO of Datapipe. “As a result, RMS has an infrastructure solution providing the reliability, security and efficiency required by high performance, big data applications.”

Traction With Data-Crunching Apps

RMS isn’t the only one crunching big data inside the Verne Global facility. Automaker BMW recently moved a group of applications to Verne Global, including crash simulations, aerodynamic calculations and computer aided design and engineering for BMW’s next generation of cars.

“We’ve been able to make a lot of headway in the high-intensity computing market,” said Tate Cantrell, the CTO of Verne Global. “That’s where we really see the interest.”

The success hasn’t come overnight for Verne. Shortly after it announced its project, Iceland was hit hard by the global financial meltdown, and Verne postponed construction for a year. Shortly after it began building, ash from a volcano in Iceland disrupted global travel.

Through it all, the Verne team has persevered with its vision for Iceland as a hub for the data center industry, offering an abundance of cheap, green power and low operating costs from the free cooling enabled by the cool climate. As with any new location, the “proof of concept” provided by early customers is critical in building momentum and winning over skeptics.

“We are very happy with the reception we’ve received,” said Cantrell. “We’ve gone from literally being heckled, to the point where name brands work with us. We’re just continuing to raise awareness about the opportunity in Iceland. We believe in it. Our customers believe in it. We’ve still got to continue to educate people.”

Green Power & Predictable Pricing

This week Verne, Datapipe and RMS held a press event to discuss the rollout of RMS(one), which allows Data Center Knowledge to provide our readers with a closer look at Iceland as a data center destination. Today and in coming days, we’ll take a look at Iceland’s current data center industry, the kind of applications being hosted here, and the renewable power resources that power the nation’s pitch to server farms.

Iceland’s power grid draws entirely upon hydro-electric and geothermal power, ensuring a totally “green” power supply. That’s become an issue in the data center industry in recent years, as the environmental group Greenpeace has targeted both Facebook and Apple with high-profile campaigns blasting them for using coal-based electricity to power their servers.

One of the most appealing facets of Verne’s green power play is its ability to arrange long-term contracts that can provide predictable power pricing for 12 to 20 years. Power in Iceland is available at 4.5 cents per kilowatt hour, with lower pricing available for bulk purchases. That’s an attractive pitch when you consider the potential for fluctuations in power pricing in countries like the U.S., Britain and Germany.

“We are the ultimate energy hedge for companies,” said Verne Global CEO Jeff Monroe. “Energy costs are not going down. In most cases, they’re escalating.”

While some U.S. utilities offer access to power sourced from renewables, they often charge a higher price for that power.

“We’re green, but without the premium,” said Monroe. “Instead, you save money on that hedge.”

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About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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