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April 2, 2008

Some are starting to think that Iceland might be a good place to start building data centers. The IIIA (Invest in Iceland Agency) recently mentioned a Pricewaterhouse-Coopers survey that found that Iceland has become an attractive option for the offshore data center market.

Reasons cited were due to its cool climate, which naturally keeps facilities cool, as well as its low electricity costs.

The non-profit organization says that only half of the country's energy potential, which primarily comes from geothermal and hydroelectric sources, has been tapped and it is the only Western European country that produces all its electricity from emission-free and sustainable natural resources.

This is a factor that may be attractive to a large number of hosting providers and data center operators, especially from Europe and North America where green hosting and energy efficient technologies have been in high demand recently.

Although the IIIA says many benefits exist in building a data center in Iceland, according to Wired, some industry observers find that the 720 Gbps cable connection to be grossly insufficient.

But local government-funded firm Farice is planning two new submarine cables for the end of 2008 that will link Iceland to Greenland and the U.S. in the west, and Denmark in the east.

Farice say this will give Iceland a total capacity of between 1.9 Tbps to 3.8 Tbps.

The IIIA also says that Iceland is a particularly "excellent location for a secondary data center specializing in data storage services and disaster recovery for foreign companies."

The IIIA added "overall, Iceland is a lower-cost location for large international data centers and can offer clean, renewable energy at a very competitive price. The country offers lower cost for data centers than the U.S., the U.K. and even India.

As an added advantage, the IIIA says Iceland also offers the lowest corporate tax in the OECD at 15 percent, highly skilled IT labor at competitive prices and low real-estate and/or leasing costs."

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Source: Tech Blog