Sci-fi writer Neal Stephenson first wrote about data havens in his 1999 book, Cryptonomicon, which among other themes, featured a main protagonist who is building a large facility in South East Asia for storing the escalating amount of data in the world.

Then back in 2000, a 21-year-old MIT dropout named Ryan Lackey founded the world’s first data haven on an abandoned WWII anti-aircraft platform six miles off the coast of Suffolk in the UK. While Lackey’s HavenCo never did achieve much success due apparently to management and technical issues, it did attract customers and proved the concept of such facilities.

Now the Invest in Iceland Agency, a government-backed entity, seems to have caught onto the same idea. More importantly perhaps, it seems it has covered all the key points in its marketing spiel.

Instead of pitching a secure, dedicated facility for storing sensitive data, which it offers naturally due to its remoteness, Iceland points to two key assets that make it an ideal location – operating costs and availability of energy.

“Iceland’s operating environment is competitive with leading countries in the industrial world,” an agency announcement said. “With its low tax structure, high education levels and competitive costs for skilled labor, land and electricity, Iceland is a strong candidate for businesses to short-list when seeking new locations for their international data center operations.”

According to the agency, a benchmark survey by PricewaterhouseCoopers, Belgium puts the cost of operating a data centre Iceland below the UK, the US and even India.

“By almost any international comparative assessment focusing on IT competitiveness of the society and the IT use of the population, Iceland scores best in class,” PWC said. “Iceland provides a clear and attractive offer to the question where the power and cooling issue can be managed at attractive cost and without operational impacts in terms of growth and stability. With Iceland having plentiful supplies of low cost green power, cold air/water as well as hot water, the benefits to large data centre operators would soon pay back.”

One of the key requirements of any data haven is connectivity, and in this respect, the agency points out that at least two new cable systems will be coming online this year to link the country up to both Europe and North America.
Supplementing the country’s two existing cable systems, Farice 1 (20Gbps, upgradeable to 720Gbps) linking to the UK and the Faroe Islands, and CANTAT 3 (5Gbps upgradeable to 7.5Gbps) connecting Canada, the UK and Denmark, will be Danice linking Iceland with Denmark, and Greenland Connect linking the country to Greenland and Canada. The new cables will offer as much as 3.8Tbps of capacity into the country, the agency said.

Two new cables to bring 3.8Tbps of new capacity to Iceland (source: Invest in Iceland Agency)

ABUNDANT POWER:
As asserted by PWC’s report, Iceland also excels in the other critical quality necessary for locating large data centres – access to lots of power, preferable cheap power. In the case of Iceland, there’s a lot of power and more still untapped and as a bonus, its green and emission free.

“Iceland is the only country in Western Europe that still has large resources of competitively priced hydroelectric power and geothermal energy remaining to be harnessed,” the agency said. “Only a fraction of the country’s energy potential has been tapped and it is the only western country that produces all its electricity from emission-free and sustainable natural resources”

That’s not all. The agency says that Iceland’s remote, yet strategic (being in the middle between North America and Europe) location, makes it the ideal data centre site, especially those for disaster recovery, for companies that operate in both markets. Its remoteness also reduces political risks, according to the agency, who points out that the country has no military and has never actively engaged in war with other nations.

Other features that the make Iceland the ideal data haven include a low land and housing cost, high computer literacy and an ample supply of IT skills, reliable domestic communications infrastructure, an open regulatory environment, low corruption and crime rates, and the second lowest corporate tax in the OECD at 15%.

According to the government, two technical parks have been under development and serve as potential sites for new data centres. The University of Iceland has planned a technical (science) park in central Reykjavík at a site next to the campus. The complex is a construction of 540,000 square feet (50,000 m2) of space to rent in 14 buildings that are linked with hallways. The second technical park is under development by a dedicated project. The site under development is 200 acres (80 ha) and is centrally located within the capital area. When fully built the complex is expected to have 2.3 million square feet of building space, or 220,000 m2. On the site there will be parking space for 8-9 thousand cars.