High-speed transatlantic cable to pitch Ireland against Iceland as data haven
Published 26/03/2012 | 05:00
A major new transatlantic optic fibre cable that has been hailed as a coup for Ireland's telecoms infrastructure is unexpectedly set to pitch the country's growing data centre business into competition against Iceland.
Last December, US firm Emerald Networks said it had teamed up with Dublin-based PiPiper Infrastructure to lay the high-speed cable across the Atlantic. It's hoped the $300m (€226m) cable project, which is slated to be completed by next year, would attract data centres to Mayo.
But Iceland's nascent hi-tech industry is also pinning its hopes on the Emerald Networks cable to kickstart its fledgling data centre business.
Following Iceland's banking bust, the country is hoping to capitalise on the rapidly growing demand for data centres in locations with benign climates.
Ireland's temperate climate helps to keep the running costs of energy-hungry data centres down. That has partly prompted tech giants such as Amazon, Microsoft and Google to site major data centre facilities here.
Last month, Microsoft said it would spend close to €100m expanding its data centre in Clondalkin, Dublin, bringing its total spend to almost €500m.
Christian Belady, a Seattle-based general manager for Microsoft's data centres, said the company continued to "explore new regions where infrastructure may be needed", declining to discuss specific locations.
Iceland has sought to reinvent itself as a safe and secure data haven halfway between Europe and North America as it recovers from the economic meltdown after the failure of the country's top lenders in 2008 when they defaulted on €64bn.
Bjorgolfur Thor Bjorgolfsson, Iceland's first billionaire and the former owner of one of its largest failed banks, Landsbanki, opened a $700m (€527m) data centre called Verne Global on a disused NATO airbase in Iceland last month.
The Wellcome Trust, a £14bn (€16.7bn) UK investment foundation, is also betting big on Iceland. The organisation is the largest investor in Verne, as well as a shareholder of the Emerald cable.
Iceland's data centres are also betting on a change in a tax law that cuts the levy on importing equipment as the government seeks to re-balance the economy away from financial services.
Iceland provides free cooling to data centres by using so- called 'heat wheels', which funnel hot air out and cool air in.
The volcanic island's power is provided by renewable energy from hydroelectric and geo thermal power plants, with contracts locked in for as long as 20 years, according to Einar Hansen Tomasson, project manager with Invest in Iceland Agency, which is promoting the island, alongside other opportunities such as mink farming. (Additional reporting-Bloomberg)