Scandinavia is becoming the new Euro hub for green IT

So Ballmer’s out and Microsoft have woken up to the reality that Microsoft will die without mobile. One of the more interesting tidbits reported in the morning news about Microsoft buying Nokia’s cell phone business was that in 2010 Nokia had 64 percent cellphone market share in China. Today it has 1 percent. The world changes very quickly.

And speaking of landscape shifts, Scandinavia is quickly becoming the new data center hub in Europe. During the deal’s announcement Ballmer took the opportunity to say the following about its European data center plans:

“We are deeply committed to Finland [and can now announce] Finland as the home for a new data center for Microsoft that will serve customers around Europe… [It will cost] over $250 million in capital and operations over the next few years.”

There are a number of reasons for this. Cooling costs are lower in Scandinavia because of the very mild temperatures and we’ve seen innovations like seawater cooling. The area is close enough to mainland Europe to keep latency times down and there’s enough fiber to keep data moving. Also, utility rates in much of mainland Europe can range from reasonable to unattractive. It’s unclear how Microsoft’s data center will source its power but we have seen 100 percent renewable data centers in Norway which recently rolled out long term fixed electricity pricing.

North Carolina and Washington have proven hubs here in the U.S. but neither have easy access to renewable energy, which is why we’re seeing an uptick in Iowa (accessible wind power). I do wonder if we could see another U.S. data center hub built around a big renewable energy source somewhere in the U.S. where there’s strong access to tax incentives and broadband infrastructure.

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Adam Lesser

Analyst Gigaom Research

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