India emerges as the second most risk ridden Data Center Location

Infotech Lead India: India has emerged as the second most risk ridden Data Center Location among the top 30 countries.

According to a study conducted by Cushman & Wakefield and hurleypalmerflatt, main parameters that looked to be deterrents to the attractiveness of the country and on which India scored the lowest were Ease of Business, Inflation, GDP per Capita and Corporation Tax.

India, however, ranked high on the parameters of cost of labor and sustainability, which have been India’s advantages over the last two decades.

Criteria such as Quality of power and outages represents a challenge in India which is often exacerbated by increasing IT loads.

India and key Asian economies remain preferred locations for DCs and have witnessed a growth in demand owing to various advantages. India offers the advantages of cost benefits and sustainability of operations.

“We would expect the growth to continue as this is also coupled with a rising domestic demand for IT services where internet and mobile communication penetration is still moderate. Investment by overseas players continues showing confidence in the future potential of India. At the same time it is important to put in place various initiatives for developing other areas such as energy, bandwidth, improving business environment, data protection laws, etc., which can enhance the proposition for India,” said Arvind Nandan, executive director, Consultancy, India, Cushman & Wakefield.


Data Centre Risk Index 2012 Results


1 100 United States 16 65 Ireland
2 91 United Kingdom 17 64 Singapore
3 83 Germany 18 63 South Africa
4 81 Iceland 19 62 Malaysia
5 80 Canada 20 60 Japan
6 80 Qatar 21 59 Spain
7 80 Hong Kong 22 58 Poland
8 79 Sweden 23 56 Australia
9 78 Finland 24 55 Russia
10 75 Switzerland 25 54 Czech Republic
11 75 France 26 51 China
12 75 Norway 27 49 Mexico
13 74 Korea, Rep. 28 31 Indonesia
14 73 Netherlands 29 31 India
15 70 Thailand 30 26 Brazil

Source: Cushman & Wakefield and hurleypalmerflatt


More companies are looking to locate their data centers in the Nordic countries as they opt for renewable energy and carbon neutrality. Data centers account for a growing share of the carbon pollution associated with the IT industry. With the move to cloud computing, IT companies are spending more money on new space for data centers. Recently there has been criticism of several large technology companies for their alleged reliance on highly polluting coal to power their data centers.

Sustainability continues to grow in importance amongst companies. The availability of renewable energy at an affordable cost is becoming more of a challenge. The Scandinavian countries are an increasingly attractive prospect. The colder climate allows improved free cooling or at worst, reduced mechanical cooling, and there is access to almost limitless supplies of hyrdo power or alternative renewable energy, with comparatively inexpensive rates.

Data centers house business-critical information technology systems. Any downtime has the potential to cost millions in lost revenue and threaten the viability of an organisation. The Data Centre Risk Index 2012 report evaluates risks to global data centre facilities, helping companies make informed investment decisions about where to locate their data centers, to increase their efficiency and lower costs.

The U.S. retains its first place ranking and is considered the lowest risk location for building and operating a data centre in the world. It holds top position for international bandwidth and performs well in the other tier 1 risk categories. It also has the largest percentage of its population completing tertiary education. The


UK secured the second position  largely driven by its high international internet bandwidth capacity and ease of doing business put it above all other European locations. Germany and Canada remain in the top five low risk locations.

Hong Kong has maintained its position as the location with the least risk in Asia, and ranks seventh. Republic of Korea (South Korea) was the second most attractive location in Asia, ranking at 13th position. The other major global outsourcing location China

“What we are seeing, certainly in the data storage market, is the rise of the Nordics, which may in the future dilute the market share from the traditional centers in Europe. Google has built a facility in Hamina, Finland and Facebook is constructing a substantial new data center in Lulea, Sweden. The cool climate is ideal for free cooling technologies and the abundance of renewable power and water make this region an increasingly attractive option. Iceland, ranked fourth is a new entrant to our Index and is the highest ranked of the Nordic counties,” said Keith Inglis, partner in the EMEA Data Centre Advisory Group at Cushman & Wakefield.

Indonesia, India and Brazil are all considered growth markets, but with barriers to entry, regulated markets and high energy costs they do score poorly relative to the more established economic markets. Connectivity is also a problem but as these markets continue to be invested in and the infrastructure becomes more developed we would expect them to rise up the rankings.

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