Business Irish

Saturday 16 December 2017

Adrian Weckler: Apple’s €850m data centre is a clever geo-political move

For the project in Athenry, Apple will recover land previously used for growing and harvesting non-native trees and restore native trees to Derrydonnell Forest. Photo: Apple
For the project in Athenry, Apple will recover land previously used for growing and harvesting non-native trees and restore native trees to Derrydonnell Forest. Photo: Apple
Adrian Weckler

Adrian Weckler

Why did Apple choose Galway to locate what will be one of the biggest, most modern data centres in the world?

Armchair political pundits will be unable to resist the idea that the €850m facility, measuring a whopping 1.8m square feet, is some sort of ‘payback’ for Ireland standing up for Apple during the company’s European and US tax inquisition over the last 18 months.

But if there is any politics involved in the decision, it may be more closely related to data jurisdictions. By locating such a big data centre here, Apple is spreading its legal base outside the US. That means that it’s less prone to one government ruling and snooping over its users’ data.

Lest anyone wonders about this as an issue, just look at Microsoft: it has the Irish government as a legal ally in a court action to stop US authorities getting customer data that is located on its Irish servers.

With so many people in Europe using iPhones (and, especially, iMessage), this is a vital strategic consideration for Apple. Protecting users’ privacy is one of Apple’s selling points, especially as it tries to copperfasten its hold over the lucrative business market.

To be clear, Apple is not referencing this as a reason for locating this data centre here. Executives say that the decision is about serving its European customers faster, as data ‘latency’ rates are far better connecting to a centre here than in the US. This makes absolute sense.

There are other reasons Apple has chosen Galway, too. Recent improvements in trans-Atlantic fibre connectivity into the West doesn’t hurt. And Ireland’s growing use of wind energy appeals to Apple, which has pledged that the data centre will only be powered by “clean, renewable energy”.

(This is already stirring up micro-fights, with ‘pro’ and ‘anti’ wind activists using the announcement to further their own agendas. Apple will work hard to avoid any controversy over the issue and says that it is committed to working with local communities. It also says that despite referencing wind, and despite pledging to make the data centre powered by renewable energy, it has not specifically set on wind as its absolute energy of choice. It also says that it won’t build any power-generating units on the Athenry site.)

Of course, the government and the IDA will look to take as much credit as possible, here. One thing that's probably discountable as a bottom-line consideration for Apple is financial aid: this is a company with €155bn in cash. A couple of million in support either way is unlikely to have been a decisive factor for it. In any case, there aren't actually that many jobs associated with the project -- just 300, including construction jobs.

One thing it should not be mistaken for, however, is the dawn of a new tech ecosystem for rural Ireland. Data centres generally are not ‘hubs’ or ‘clusters’. They don’t spawn a lot of startups in the way that, say, Google’s Barrow Street facility does. Dublin will overwhelmingly continue to be the place that most tech companies seek to locate main offices in.

But the move means that Apple, Google and Microsoft have all now chosen Ireland for their data centres. Others are set to be announced in coming weeks, too. Ireland is the place to locate a data centre, it seems: a combination of the ‘right’ temperate climate, increasingly stable power sources (crucial to data centres) and a growing engineering competency here are all working in our favour. And there is no question that this will be a world class facility.

This is a big day for Apple and for Galway.

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