Study ranks US as safest place to run a data centre



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24 May 2013 | 0

According to a worldwide survey, the USA was the safest place in 2012, or the least risky, place to run a data centre.

The rankings, which were released by Cushman & Wakefield, Hurleypalmerflatt and Source8, were made after measuring risks related to physical, economic and social issues in the countries. The US was followed by the UK, Sweden and Germany, while Indonesia, India and Brazil were at the bottom of the list. The study ranked 30 countries, with Ireland ranked at sixteenth, behind Thailand, on concerns for energy security and sustainability, but also high energy cost.

The issues considered for the study are usually taken into account by companies when establishing data centres. The risk index included weighted ranking of energy, bandwidth, ease of doing business, tax, labour, political stability, sustainability, natural disasters, education, energy security, GDP per capita, inflation and water resources.

The US remained at the top despite natural disasters such as Hurricane Sandy, which knocked out power supplies and left many data centres offline on the East Coast for weeks in October. The US rated 29th out of 30 countries on natural disasters and ranked last on corporate taxes, but the establishment of data centres continued to grow as mobile device shipments increased and companies increasingly deployed public and private clouds.




"This is prompting strong demand for colocation data centres, as public and private cloud-based storage and backup providers emerge as viable solutions for outsourcing although organisations continue to struggle with security and access issues," the study said.

Data centres have been established by Facebook, Apple and Google in Oregon. The San Francisco Bay Area, northern Virginia, Las Vegas and Phoenix are also growing data centre markets, according to the study.

Eight of the top 15 countries ranked were in Europe, and Sweden and Norway became hot spots for data centres, according to the study. Easy availability of hydropower and naturally available cool weather prompted many companies to establish data centres in Sweden. Scandinavian countries recorded the highest jumps, with Sweden rising five spots to third and Norway up four spots to eight.

The rest of Europe was on shaky ground. The UK ranked second because of Internet bandwidth and ease of doing business, but "heavy reliance on fossil fuels scores poorly for sustainability and energy security," according to the study.

France and Germany, which are major data centre hubs, are being threatened by high labour costs and energy security. Despite vast energy resources, Russia, which ranked 24th, was considered a risky place due to high inflation rates, political instability and difficulty in doing business.

"The UK, France and others are facing a generation supply gap and clear strategy and investment policy is required from their respective governments," the study said.

But as LTE deployments grow, there will be a need for more data centres as more companies centralise applications and deploy private clouds. That should give new life to the European data centre business, according to the study.
Ireland’s ranking of sixteenth place was bolstered by high GDP per capita, high education levels and ease of doing business, but energy concerns detracted. A major concern was national connectivity.
"Home to a number of data centres and benefiting from low corporation tax, ease of doing business, high GDP per capita and high levels of education," said the report. "Cost of labour and energy is relatively high and connectivity capacity is low compared to the rest of the table. Additionally Ireland falls into the bottom half of the table for energy security and sustainability."

Economies in Asia are growing, but a range of issues, including poor connectivity, government rules and supply-chain problems remain challenges in establishing data centres, according to the study.

For now, strict regulations have made it difficult to establish data centres in China, but that could change in the future, according to the study.

The growing presence of foreign companies in China has increased demand for data centres with operational efficiency matching global standards, according to the study. That could pressure local operators and also create opportunities for new companies looking to establish data centres. Many data centres are in the Shanghai and Beijing areas, but data centres also have been built in Guangzhou, Chengdu and Shenzhen, according to the study.

Qatar, which ranked 10th, was rated as the lowest-risk place in Asia to establish a data centre. But a number of companies, including Intel and Advanced Micro Devices, have established data centres in Malaysia in recent years. Malaysia was viewed favourably in the survey for a balance of low energy costs, low inflation rates and ease of doing business, but poor Internet connectivity and political instability remained concerns.

IDG News Service and TechCentral Reporters

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