Finland cashes in on cold by luring data storage firms

HELSINKI - Agence France-Presse

A picture taken on September 10, 2011 shows the Google data center in Hamina, Finland during it's official opening. AFP Photo

With freezing winters where the mercury can sink well below zero and cool summers, Finland will never be a destination of choice for the world's sun-seekers.
      
But its chilly weather has attracted technology giants such as Google and Microsoft that seek a cool haven for thousands of servers holding terabytes of data from around the world.
      
"In Finland we are excited that we can finally turn (our) cold climate and uneventful boring society into a competitive advantage," said tech-industry writer Petteri Jaervinen.
      
The rapid rise of the Internet and the digital economy have fuelled an exponential growth in demand for data storage.
      
But data banks generate a lot of heat and are very expensive to cool, particularly in hot weather. That means companies can bank large savings by locating servers in countries like Finland, with its cool climate and temperate summer.
      
In 2009, Google bought an old paper factory in Hamina, a town near the Russian border, and converted it into a data centre cooled with Baltic sea water.
      
Microsoft followed suit late last year with a $250-million project to build a data centre in northern Finland.
      
Microsoft also bought the handset unit of Finnish mobile telephone maker Nokia, but said Thursday it will slash 18,000 jobs from its global workforce, most of which are at Nokia.
      
Now, Helsinki hopes a new 1,000 kilometre (620 mile) fibre-optic cable beneath the Baltic Sea will give it an extra edge in the global data race -- and a much-needed shot in the arm for its flagging economy.
                      
After two years of recession, Finnish policymakers are desperate for good news -- and the cable linking Finland with Germany, which could be operational as early as 2015, might be it.
      
Minister for International Development Pekka Haavisto hopes the cable can help revitalise the technology industry in a country that once led the field in innovation as the home of Nokia, but has since fallen on hard times.
      
When plans for the undersea link to Germany were unveiled last year, he mused that it could one day be hooked up via Finland to another that could run under the Northeast Passage -- providing a superfast data route to Asia.
      
That, he hoped, would make Finland "a decisive link" in the global data network.
      
It's not just the weather attracting tech giants to Finland, with its existing 7,100 kilometres (4,400 miles) of domestic fibre-optic cable laid down along railway tracks already a powerful draw.
      
"Without the cables, we wouldn't have customers," said Carl Wideman, director of Invest in Kainuu, an agency which promotes the central region of northern Finland.
                      
Britain's Telecity is already taking advantage of the cost advantage of locating its storage centres in Finland, with several located around the capital.
      
Walking past banks of humming servers in a massive data storage centre on the edge of Helsinki, Telecity's sales manager Sami Holopainen sees the Baltic Sea cable as "very good news".
      
Other Nordic countries are also trying to take advantage of rising demand for data storage.
      
Sweden, home to Facebook's first European data centre, and Iceland, which boasts a strategic location between Europe and the US, are also cashing in.
      
"The Nordic countries have fairly similar qualities: cold climate, political stability, good infrastructures," said Keijo Heljanko, an associate professor of computer science at Helsinki's Aalto University.
      
That means Finland's new fibre-optic cable could give it a decisive edge over regional rivals.
      
The cable will connect it directly to Europe, cutting out the current transmission route through Sweden and then under the Oeresund strait to Denmark.
      
Cutting the number of countries data streams have to pass through not only makes systems more efficient, it also reduces the risk of exposing them to prying eyes.
      
"In Sweden, the intelligence agency has an open and legal mandate to spy on everything that passes through the Swedish networks," said high-tech specialist Jaervinen.
      
"In Finland, we don't have any of this."                       

For the Nordic country mired in recession and grappling with an ageing population and rising unemployment, attracting new industry is vital.
      
The Finnish government is backing the data storage drive and has pledged to finance one third of the 100 million euro ($136 million) Baltic cable project.
      
Regional business promoter Wideman said the goal "is not to just house these centres, but to create jobs around them," such as in software research or services.        

"The building stage of the centres creates a lot of temporary jobs. Once this phase is done, high-skilled jobs around those technology hubs can be developed," said Heljanko from Aalto University.
     
Finland's big data dream has its critics too, however, who argue the jobs provided by the storage centres will mostly be low-skilled maintenance roles.
      
"Data centres sucking out our cheap electricity and not contributing to the local economy are not a good scenario," said Jaervinen.