Verne Global Aims to Put Iceland on the Data Center Map

By: Paula Bernier

Most people would probably have a tough time finding Iceland on a map. Yet entrepreneur Jeff Monroe is trying to get businesses to locate their data center operations there.

Monroe, CEO of Verne Global, says Iceland is an ideal place to house select IT applications due to its unique location and environmental features, not to mention a handful of other benefits. Iceland is impacted from cold in the Northern Hemisphere, he notes, but it’s also impacted by the Gulf Stream.

“It creates an environment that allows us to do free cooling 100 percent of the year, which is extremely unique,” says the leader of Verne Global, aka Verne Holdings, which in 2007 was formed as a joint venture of Cambridge-based venture capital firm General Catalyst Partners and Icelandic private equity outfit Novator.

Free cooling means the ability to capture outside air to cool the servers. Basically, it involves exchanging heat between servers with cool air from outside the data center. While free cooling may seem a small matter, it actually can add up to huge savings given between 30 and 80 percent of data center energy costs involve cooling the servers, says Monroe.

Perhaps more important, however, is that Verne Global’s data centers will employ 100 percent renewal energy sources and thus have a zero-carbon footprint, he says, adding all energy used at the sites will be geothermal and hydroelectric. Those sources are affordable and accessible, he adds, and the fact that Iceland has a relatively new utility grid means less maintenance and thus lower costs.

“So you’ve got an extremely inexpensive power source,” he says. “You’ve got an abundant power source. You’ve got a utility industry that has the ability to provide 20-year visibility into your power pricing. Think about how powerful that is when you compare it to any other city on Earth that you can find, and the volatility you can find with that power pricing anywhere else.”

For companies in the United Kingdom, where energy costs are high, Verne Global’s data center in Iceland could deliver $100 million in savings over a 10-year contract.

“It’s huge, huge savings in a market like the U.K. You compare it to a market like New York, New Jersey, and it can come in around $50 million to $60 million U.S. dollars,” he says, adding power costs in Iceland are half to a third of the cost in major Northeastern U.S. cities.

And although Iceland may seem like a strange and far-flung location at which to locate a data center, he says, it has an educated and English-speaking populace, and the redundant, resilient multiterabit subsea fiber optic cable in which the country’s government invested before the economic crash provides more than adequate connectivity to multiple points in Europe as well as North America. He declined to detail how the added connectivity costs would affect customers’ overall cost savings.

“Iceland for years has been trying to figure out how they can shift the power out to other places,” he says, “and there’s no better way or more efficient way to shift power as information over a fiber optic cable.”

That said, not all applications are ideal candidates for the Iceland data center, Monroe adds.

“For example, if you have an application that requires a ton of bandwidth, but which uses almost no power … Iceland starts to look less attractive,” he says.

Verne Global’s sweet spot is providing outsourced data center services for companies’ computationally-intense, mid-range bandwidth applications. Monroe says every major company, whether it’s in financial services, oil and gas exploration or whatever other field, tends to run batch jobs that fit that description.

Streaming media applications would work as well, he says, adding “once that connection is made it doesn’t matter whether you’re 10 milliseconds or 80 milliseconds away from the source.” IT

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