With sustainability and energy prices in the headlines on a near daily basis, organisations are looking for opportunities to meet their ESG goals at the lowest cost possible. Our name – D9 – was inspired by the UN Sustainable Development Goal #9. We are committed to sustainable digital infrastructure and the benefits it offers both the environment and companies pursuing a strong ESG programme. In this Q&A with D9 portfolio companies, Verne Global and Ficolo, we will discuss data mobility and why moving data centres to the Nordics makes economic sense.
In the last decade, we have seen significant changes to the computing landscape. There has been increased migration to the cloud for all forms of compute. We’ve also seen a growing movement towards edge computing, as well as increased applications of high performance computing (HPC), artificial intelligence (AI) and machine learning (ML). In 2020 alone, global internet traffic surged by more than 40% due to the increased video streaming, video conferencing, online gaming and social networking necessitated by a global pandemic.
Coinciding with this has been an increased demand for power putting strains on most of Europe’s electricity grids. Not to mention the need for more sustainable solutions as the climate crisis worsens. In “Mind the Gap: Energy Availability and the Challenge for European Data Centers”, Peter Kelly-Detweiler, principal of Northbridge Energy Partners, states “As the virtual world grows in scale and complexity, data centres rely on a steady supply of very physical and very real electrons. In the past, [companies] could generally assume the required electricity supply would be readily available. They did not have to care much about where their electricity was coming from, or the reliability of the associated infrastructure. Today, that is no longer the case. [Companies] looking to outsource to a third-party data centre or cloud provider must consider access to affordable, reliable, and clean electricity as a prerequisite in the decision-making process.”
The focus on sustainability is driving companies to rethink where their data centres are located. Organisations have become comfortable with the idea of locating their IT equipment and applications in specialist data centres providing colocation and cloud-based services, particularly those powered by renewable resources. Data centres no longer need to be next to corporate headquarters for the vast majority of business applications. Only the most latency-sensitive applications – high frequency trading, 4K/8K HD video services, autonomous vehicles, etc – require processing near the source of data. The vast majority of data sets can be split with the most energy intensive workloads moved to renewable powered locations, like the Nordics.
As part of decarbonsing the internet, D9 believes data centres located in cooler climates with abundant renewable power offers an attractive solution to an increasing digital infrastructure energy footprint. Why? In places like the Nordics, power is not only renewably sourced, but is 80% cheaper than other European markets and offers stability with long-term price guarantees. As a result, it becomes more economical and sustainable to transfer data between locations than it is to transfer power from one country to the next. We recently sat down with the CEOs of two of D9’s portfolio companies, Dominic Ward of Verne Global and Seppo Ihalainen of Ficolo, to talk about this idea in more detail. We discussed the concept of dissecting data centre latency and why it’s been so successful and beneficial for their customers.
With the abundant supply of renewable energy in the Nordic countries, the first instinct for many seems to be to find a solution for exporting that power. In reality, it makes much more sense for an organisation to move their data closer to the power source. Can you explain why?
Dominic Ward: One of the fundamental attributes of data is its mobility. Data is much more mobile than power. It does not have to be processed or stored in a particular location. Most data can be transported to a location where it can be most efficiently processed. I believe that is the key concept here – efficiency. Wherever data is located, the infrastructure to support that data must be optimised to be as efficient as possible.
Seppo Ihalainen: I agree with Dominic and would like to add three key points to this discussion. First is scalability. Data infrastructure scales much more easily and efficiently than power infrastructure. Second is that the temperature in the Nordics is cooler and enables year-round free cooling for a data centre operator, which is more cost-effective for the customer. More than that, and this is my final point, you actually need to use less power up here because we don’t require the same air conditioning infrastructure to cool the IT equipment.
What kinds of applications are ideal for data centres based in Nordic countries?
DW: For more than a decade, we’ve been focused very much on the part of the market which is latency insensitive, usually high density or high performance computing applications and workloads. It is often driven by customers who can think slightly differently and tend to be more forward looking. Our customers recognise this application set and these workflows can sit in a location that is absolutely optimised for this type of compute. Certain applications which are for example latency sensitive can sit in a city centre location, but everything else can move to the Nordics. Thanks to the public cloud, IT and data centre infrastructure managers have really internalised the concepts of distributed workloads. They are now thinking about where they can move applications based on different infrastructure for different types of environments.
SI: For Ficolo, we have been focused on the automotive and financial sectors. The research and development at automotive companies requires high performance computing workloads as they render and model the aerodynamics of a new car, for example, which requires crunching huge amounts of data, but is not latency sensitive. For financial services, they depend on HPC for things like fraud detection, customer service and compliance. There are plenty of opportunities across any type of R&D, public sector, weather forecasting, oil & gas – the list is endless. Most workflows which require huge amounts of data and AI applications can move to a Nordic location.
What are some of the ways you are helping companies reduce their carbon emissions and meet their sustainability goals?
SI: One of the things we focus on is the carbon handprint of our operations. There is the carbon footprint that everyone knows about and is the negative impact of our actions on the environment. The carbon handprint is when you do something positive outside of the organisation and its corresponding impact on the environment. We believe it is really important to maximise your positive handprint.
One of the ways we do that is through our heat reuse programme. We already run on 100% green energy to power our data centre operations. Once we are done powering the service, we can then take the heat and reuse it to distribute to the local community. We are connected to the district heating grid, so we push it straight to the distribution channel. The benefit from this is that we get to recycle the green power – we use it once for us and again for the community.
DW: We have recently announced we will be reporting our sustainability metrics and targets. We believe these are critical components for our customers to make an informed decision about their data centre infrastructure and where their data should be processed and stored. From the inception of Verne Global, sustainability and efficiency have been at the heart of our mission. Now more than ever, we want to encourage the whole industry to increase accountability and transparency and develop best practices. At a time when the effects of the climate crisis are upon us daily, end users and customers need every tool at their disposal to make better-informed decisions about their digital infrastructure needs today and in the future.
Creating interconnected opportunities
At D9 we believe in creating a holistic view of the global digital infrastructure network. We are acquiring best-in-class companies and unlocking synergies between them. They are globally interrelated and interconnected, and they can benefit from the convergence that exists between them.
Verne Global and Ficolo are great examples of this. They are delivering connected and optimised data centres solutions that are creating opportunities for their customers and changing the way we think about data. Between them they have 63MW of IT capacity and space for a further 150MW, so the potential is tremendous. They also have over 170 customers, 42% in the HPC/Artificial Intelligence/Machine Learning space, 42% in finance and large enterprise, and 16% in Cloud and IT services.
Our data centre strategy is focused on growth, identifying strategic locations that are suitable based on their level of connectivity, access to “eyeballs”, and access to renewable energy. We also leverage our growing subsea network to drive connectivity to these locations, so that customer data can be stored and processed – the symbiotic relationship between subsea networks and data centres is a significant differentiator of our platform-based approach to digital infrastructure.