Rising cost of data centers is shifting our focus

Jul 7, 2023
David Sandars, UK Sales Director

How the rising cost of data centers is shifting the focus to the health of our planet.

The Uptime Institute recently released a survey on Data Center and IT Spending in 2022, which showed an expected rise in operating expenditure associated with data center and IT infrastructure costs, with power being the greatest increase for most operators as a result of energy price hikes, grid supply versus demand and the war in Ukraine. Regions across the UK and Europe that have typically relied on fossil fuels are at the center of these increases. 

This is not surprising, nor revolutionary in its findings — it is a culmination of several factors, not least the perfect storm of digital innovation meets the energy crisis. For many years, atNorth has been championing the Nordic region as the ideal location for data center development, and for good reason.

In fact, I touched on this in my last blog, Sustainability and Efficiency: How Small Changes Can Create Big Benefits, diving into the role of sustainability and energy efficiency across the IT function as we’ve seen huge pressure on carbon emission reductions coupled with energy price hikes at the turn of the year. 

Yet, cost still seems to remain the key consideration for businesses and organizations today, rather than shifting the focus towards the growing, critical importance of sustainable IT and its role in contributing to the health of our planet. From increasing regulations to the continued struggle with energy prices, IT leaders can no longer ignore the need to reduce their CO2 footprint and overall emissions.

A Natural Infrastructure at Play

With its abundant natural resources, alongside its government incentives towards sustainability, the Nordic region continues to prove itself as the leading location to power data centers through the current global energy transition, where renewable electricity, low carbon power, land resources, and circular economy support are prevalent. The best news for data center users is that the energy has the magic blend of being low carbon and low cost. The ability to provide cost stability, as the price of renewable energy isn’t as affected by political and economic upheaval or regulatory changes, is extremely beneficial as compared to countries that rely on fossil fuels. 

The colder Nordic climate also offers a considerable advantage for data centers to maintain ambient air temperatures across facilities in a cost effective and sustainable way. While these may seem like small steps, they are much needed advancements that are significantly driving operating costs down – at a time where the cost of living is sharply rising, this is crucial for business to continue as normal. 

In addition, many governments across the Nordic countries are implementing programs to facilitate the circular economy. Stockholm Data Parks, an initiative driven by the city of Stockholm, is a perfect example. Our own purpose-built data center facility, SWE01, is strategically located within the Parks, which allows us to capture up to 85% of the electricity waste and excess heat generated by our data centers. This is then recycled through the district heating system to provide hot water and heating for up to 20,000 homes in the area – something so logical and so simple is proving to be a successful proof point for circular economy principles within the data center and IT industry. 

A Warm Welcome from the Nordics
While research like the Uptime Institute’s Data Center and IT Spending in 2022 report shed much needed light on our industry, we mustn’t forget where priorities lie not just today, but for tomorrow’s generations too. Putting cost and environmental savings at the top of the IT agenda is crucial for any organization that wants to flourish and remain competitive in an increasingly cutthroat world. 

The Nordics not only can deliver renewable energy, but these countries also have the infrastructure in place to enable the circular economy with initiatives such as data center heat recovery. By housing your data in the Nordics, organizations can reduce their overall energy consumption and do so at a lower cost than most other European locations. 

It’s a win-win – one that some businesses have had the good fortune to be ahead of the curve on. Leading global financial institution, BNP Paribas, has recently been working with our team to migrate a portion of its IT workload to our SWE01 facility in Stockholm. This follows in the footsteps of moving a portion of its IT infrastructure to atNorth’s facility in Iceland in 2018, which has resulted in reducing its energy usage by 50%, decreasing its CO2 output by 85%, lowering its overall TCO and has helped propel the organization towards a future-proof, environmentally responsible HPC environment.

As organizations look to reduce operational costs, lower their overall TCO, and meet key initiatives such as sustainability, the Nordics is a reliable home to provide the best possible infrastructure to support digitalization and drive an environment-first approach to drive increasingly crucial sustainability initiatives. 

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