Is there a future for data centers in northern Russia?

The Russian government recently started a project to build data centers in the Northern part of Russia. In this article it is questioned, whether this is a profitable project and if there is a future for data centers in Northern Russia.

 

It is an ongoing debate, do you build your data center close to the facilities where it is needed, or do you place it in a remote area where it has the most profitable environment with respect to the cost of construction and cooling. As in the rest of the world, this debate is also active in Russia where the choice has to be made between building data centers in the Central region or to move them to the Northern territories of the country. The Central region is seen as highly profitable because it is close to most businesses, but the North is beneficial with respect to the better environment regarding the cooling of the hardware.

 

Why this debate is relevant in Russia becomes clear when looking at the positive numbers of the Russian data center market. According to research from IKS Consulting, the total number of racks in Russia at the beginning of 2018 was 38,7 thousand, and they expected an increase of 9,4% for the upcoming year. However, although the Russian data center market keeps growing, its share on the global market is only 1%. But this number is expected to grow to 5% by the end of 2024.

 

This forecast can be realized because the Russian government started a high-profile project to build a network of international data centers in the northern parts of Russia. And as said before, they chose this northern part of the country to save money on the cooling of the hardware components of the data center facilities. But the question to answer is whether it is profitable to build data centers in this area.

 

Pros and cons of this project

When looking at the pros and cons of this project it is first necessary to note that there are currently no eco-friendly projects or solutions to be found in the Russian Federation with respect to the construction and maintenance of data centers. One advantage of building data centers in the North is that free cooling technologies can easily be used in such temperatures, which allows to build the data center according to the latest requirements to the ecological aspects of the power supply. As such, by realizing this project, the Russian government can show better results with respect to statistics related to eco-friendly projects.

 

Another advantage of building data centers in the Northern part of Russia is that this area is well-developed in terms of its infrastructure. Because of this it is easy to get the necessary materials to the location and to construct the data center. Furthermore, the cost of electricity in the entire Russian Federation is relatively low in comparison to the world level.

 

But although there are benefits for both the global- and local economy, there are also problems and challenges to overcome. For example, the difficulty of updating the existing electric and telecommunication networks, the role of price stability for electricity and the legal conditions. However, these are not the main challenges.

 

The presence of an attractive annual temperature to save on air-conditioning is completely insufficient for the implementation of such a global project. This is because data centers are always built for specific tasks, forming technical specifications based on the needs of users and available resources.

 

Furthermore, all modern free cooling systems are now used in data centers located in areas with a temperate climate and an average temperature of 10-15 degrees Celsius. So there is no need to place them any further to the north. In addition, when building data centers in the North of Russia, a new challenge exists in the heating of the premises at the initial stage of the project, when the data center has to be build and before it is launched at full capacity.

 

Therefore, to build data centers with the main advantage of having good energy indicators seems to be an insufficient solution and the benefits do not outweigh the costs.

 

Further conditions for a successful global data center

This is supported by the fact that modern data centers only have value when their resources are connected to the global world through global clouds, traffic exchange points, telecom operators and IT resources of partners and contractors.

 

Therefore, when talking about a global super project with a clear international accent, such data centers need to ensure an appropriate level of network connectivity with Russian as well as international telecom operators. And, it is vital for such data centers to be within reach of energy networks which have enough free capacity to keep up with the demand.

 

Another important condition is the geographical location when looking at how easy it is for the technical personnel to reach the data center and for logistics to deliver the equipment. For example, it is no surprise that some of the largest data centers are located around the international airport of Schiphol in Amsterdam. This place makes it attractive for customers to transfer their equipment and even an engineer from another country can reach the place in a few hours.

 

So, without complying to the conditions of global access and a beneficial geographical location, any benefits from the lower costs of cooling the hardware will be reduced to zero.

 

Can such a project be realized in the future?

The idea of such energy-optimized data centers is upcoming everywhere in the world. For example, such projects are currently being implemented in Finland. However, what must be considered is that the users of such data centers in Finland are global IT companies which use the facilities as a part of their data center’s chain. In that case, it is enough to have one communication channel to access international providers.

 

Moreover, a project to start a network of data centers in the North of Russia already exists. In the fall of 2019, Petrozavodsk State University together with GS Nanotech announced their intention to build such a network for over 10 billion Rubles. They are planning to design data centers with a combined capacity of 20 thousand racks, as well as the creation of data warehouses and a central telecom node.

 

It makes more sense to look at the outcome of this project and what obstacles will arise before starting an entirely new project. And most important, it will be interesting to observe what kind of practical application these data centers will provide. Simply answering the question of who wants to deploy their business in these Northern data centers.

 

To conclude, it makes more sense to focus on the development of the capabilities of data centers built in familiar and accessible locations and to maximize the efficiency of these existing sites. This can be done by increasing the performance of computing resources per rack, increasing the bandwidth of the channels or to ensure connectivity of their resources with global ecosystems. An isolated, self-constrained, hard to reach, highly energy-sufficient data center in the far North is a million-dollar project without any added value but a project which can be relevant in the future.