Verne Global

Data Center | Industry |

19 September 2017

What's the real risk?

Written by Tom Squirrell

Tom is Verne Global's Director of Customer Success, and is based at our London headquarters.

Natural disasters happen but it’s how we prepare to mitigate the risk associated with them that defines how our businesses and customers will succeed or fail, thrive or crumble, move backward or forward. This is especially the case in the data center industry. In Cushman & Wakefield’s current Data Centre Risk Index Report 2016, the report emphasises that part of its analysis when assessing risk was to look at not only the vulnerability of a location, but also the coping capacity in the event of a natural disaster.

South Florida specifically, has recently been battling the worst that Mother Nature can throw against it as Hurricane Irma has battered the state. Like the Caribbean islands before them, they have been dealing with record high winds, rising water levels, surge tides, power outages and the evacuation of much of the local population. Not only is this disrupting data centers today, but it will also impact how quickly these data centers get the resources they need to operate and get back up to speed.

In the report, Cushman & Wakefield states: “a vast amount of data centers globally continue to be located within high risk locations, as service providers focus on proximity and accessibility of end markets as an acceptable trade-off in relation to the risks natural disasters pose to their infrastructures.” According to Data Center Map there are 30 data centers located in the Miami-Dade area, with dozens more located across south Florida.

Data Center Knowledge, a leading publication for the industry, recently wrote in the aftermath of Hurricane Harvey’s devastating impact on Houston, stating that “forecasters fear the worst, saying total losses from Irma could exceed those suffered at the hands of Katrina. Only time will tell if data centers in Florida come out as unscathed as those in Texas. While more than 100,000 homes and businesses in the Houston area lost power as a result of Hurricane Harvey’s torrential downpours and flooding, data centers in the area did not get flooded and were largely spared major utility power interruptions.”

To be clear, data centers in Miami are built to withstand hurricanes. It’s a seasonal threat that exists and that these operators manage on an ongoing basis. However, the questions any company must ask itself as it evaluates risk are:

  • Does Florida make sense as a data center location anymore?
  • Will I lower my company’s risk by moving some, or all of my compute resources elsewhere?
  • What location presents a lower risk factor and are there other considerations that need to be understood?

For some applications, Miami will always make sense despite the risk, but for many applications, such as disaster recovery, big data analytics, archive and storage, high performance computing and others, it might be worth considering other less risky locations.

The risk of a data center outage is enormous. According to a report from the Ponemon Institute, titled the Cost of Data Center Outages, the average cost of a data center outage has steadily increased from $505,502 in 2010 to $740,357 today. The study points out that in addition to the above process-related activities, most companies experience opportunity costs associated with the data center outage, which results in lost revenue, business disruption, customer churn, and lost business opportunities.

As forward-thinking IT leaders examine risk, the same Cushman & Wakefield report sited earlier provides some locations that limit the risk of a natural disaster impacting business. Iceland was ranked as best (the least risky) place for a data center in the world and it is one of 4 Nordic countries in the Top 5. It's telling that less than a couple of weeks after Hurricane Irma hit Florida we've already seen enquiries reaching us from Miami based data centers looking to re-locate out to Iceland.

Iceland is well worth consideration - it’s unique, abundant and reliable power-profile provides fantastic energy security and its temperate climate and stable environment present a low-risk location for data centers. Get in touch and see how we can help you.


Sign up for the Verne Global newsletter

Opinion, thought leadership and news delivered directly to your inbox once a month.