Head north for cheaper data centre cooling

If businesses move their data centres up north to Scotland, they can expect cheaper power and land costs, says the Outsourcing Hub Initiative.

Andrew Rigby, the head of outsourcing at law firm Brodies Solicitors, set up the Outsourcing Hub Initiative to encourage international businesses to outsource their data centres to Scotland. The initiative promotes Scotland's renewable energy and cool climate as key to attracting data centre development needed to support the outsourcing push.

What is the biggest selling point for green data centres in Scotland? 
Andew Rigby: The lower temperature for more efficient data centre cooling has been a very easy news bite. But the major factor is the comparative costs. A large number of data centres have been clustered within the M25, because there was a lot of what I call "server hugging" going on, where people wanted their data centres to be practically next door. In terms of costs -- just purely for accommodation and land costs -- it is between 30% and 50% cheaper in Scotland.

The largest two overheads in real terms are accommodation and power. If you can reduce those two and you take into account employee costs, which are between 40% and 50% cheaper than the rest of the U.K., that is the comparative advantage.

The Scottish government's stated aim has been to have a huge amount of its energy produced through sustainable means. They are investing much more in wind power, wave power and hydroelectric power and, believe it or not, in Scotland, the use of photovoltaic energy.

Is there really much power to be generated by photovoltaic energy in Scotland? 
Rigby: Technology has improved immensely in terms of getting electricity from daylight as opposed to sunlight. You also have to understand that a lot of the development of the technology includes the storage of the electricity.

What are the barriers to operating in Scotland? 
Rigby: One of the biggest issues that Scotland needs to bring to the forefront is the fact that it is a best-kept secret. The data centre industry in Scotland has a long history. Scotland, unlike some of the other countries, is not an emerging location. It is established.

Which sectors are most interested in using Scottish data centres?
Rigby: It comes very much down to the key areas of finance and energy, although quite a lot of smaller companies are coming in.

Is it easier to set up data centres in Scotland than in the rest of the UK? 
Rigby: It is still up to local authorities to exercise their own planning regime, but certainly there has been no problem in establishing data centres in the Highlands and Islands, which I think shows that there is perhaps a slightly more realistic approach to planning in Scotland than in other parts of the U.K.

What led you to set up the Outsourcing Hub Initiative?
Rigby: The Scottish government has the Council of Economic Advisers, and one of those advisers is Professor John Kay, a well-respected economist. And he presented his view about small countries. What he said was -- and this is what really led me to the idea of establishing Scotland as an outsourcing hub and using green technologies to support information technology -- that small countries can be successful, providing they specialise, they offer comparative advantage and they participate in global markets. It struck me that Scotland has a number of factors that would help it develop exactly that strategy.

If you are going to develop a real outsourcing industry, you need the technology to support that. And you need that technology to be as green as possible, and of course you need data centres.

I set up the initiative to try to bring together all the interested stakeholders in Scotland, from IT providers: outsourcing providers, utility companies, the academics, government departments such as Scottish enterprise and Scottish development International, and, of course, the Scottish government.

What has happened since the initiative was set up a year ago?
Rigby: It is becoming part of Scottish government strategy - the Minister for Enterprise is holding a session at the Scottish Parliament on Aug. 31, to which we are inviting 30 of the country's leading companies to come and discuss the proposition of Scotland as an outsourcing hub and how we could use IT to support the development. Data centres play a very big part in that.

If you take, for example, the Highlands and Islands of Scotland, it is quite amazing. Some of them are quite small, but there are over 40 data centres in the Highlands of Scotland. There are over 100 companies providing voice and BPO [business process outsourcing] activities, so there is quite a large data storage requirement -- particularly if you start looking at Software as a Service, cloud computing, etc. -- it is becoming increasingly part of Scotland setting out its stall to the world.

There are a number of organizations coming to locate in Scotland, but I can't give you the details. There has been the purchase of a number of Scottish companies by Indian suppliers as well, developing their global strategy, which means delivering services locally, so a lot is going on.

What does the future hold for data centres in Scotland? 
Rigby: There is a lot more to come -- great steps have been taken but I think it will be interesting to see the developments in the area of sustainable energy in data centres. It is a case of "Watch this space."

Tracey Caldwell is a contributor to SearchVirtualDataCentre.co.uk.

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