Saturday, November 25, 2017

Nordic Wars. Norwegian data centre leaders clash over gov’t support as Sweden takes lead backed by AWS, Google, Facebook

Power, connectivity, funding and hyperscalers. Heated debate in Oslo shows desire to make Norway the next premier data centre destination within the Nordic region.

Norwegian data centre leaders clashed at this year’s Datacloud Nordic in Oslo over the government’s work to support the industry and called for more help from the Storting.

The leadership panel, featuring Digiplex, Bulk Infrastructure, Green Mountain, Basefarm and Schneider Electric – although the latter’s representative was Swedish – took place just moments after Mr Reynir Jóhannesson, State Secretary, Ministry of Transport and Communications for the Norwegian Government, presented the government’s work and plans to further support the data centre sector, including a strong focus on renewable energy.

Kicking off the discussion, Bulk Infrastructure’s CEO Peder Nærbø said: “It has been a very frustrating year for us. We are nearly ready but not like you guys [other companies sitting in the panel already operating]. We are nearly there.

“We thought we would have more help from the government, but it takes some time to move a government, however, I think we are in the right way.

“And Bulk is in the right way and we are taking in the first customers and signing up the customers.”

Nærbø’s remarks were quickly faced with criticism from Anders Korshavn, SVP – Co-Location and Data Center Services at Basefarm, who looking directly at Nærbø said: “Peder, you are always crying out for the government to help you.

“I want to call out for the government to help, and a couple of years ago we told the government to lower taxes, etc, and there is still work to do there, but they have lowered the tax on power, making our power the most affordable green power in the world.

“Luckily this government stayed in power this Autumn and we look forward to clear the remaining red flags.”

The government, led by Prime Minister Erna Solberg, leader of the Conservative “Høyre” Party, has recently faced off the opposition parties during the Norwegian general elections on September 11, 2017, and won the voting through a coalition with three other political forces.

Continuing with the on-stage discussion, it was the turn of Tor Kristian Gyland, CEO of Green Mountain, to intervene, focusing on the need to bulk up connectivity investment and infrastructure.

“[The government] has done a lot but when it comes to connectivity we have to see connectivity as equal to transporting goods and people,” he said.

“We have to look at fibre as we look at when we build roads and transport infrastructure. If we are not capable to build connectivity with the help of the government, we will lack behind other competitive governments.”

Looking at the State Secretary sitting in the first row, Gyland, continued: “Please continue the good work you have been doing, but continue to help.”


Norwegian gov’t needs to look to Sweden, Denmark

As the connectivity topic was brought to the table, comparisons to neighbouring Sweden and Denmark were inevitable.

Gisle Eckhoff, CEO of Digiplex, which also operates in Sweden, warned of the need to be “much more organised and coordinated” in Norway.

“[Comparing to Sweden], there is a clear trend because you have some of the global guys there and that also drives people there, so connectivity is the driver there.”

Building up on that, Korshavn added to Eckhoff’s views that there is a lack of funding, but if the government was to back the industry, the executive shows confidence the industry and the country will be able to build a premier data centre destination.

Also speaking of investment, Nærbø said that on the funding side, the major problem in Norway is that “up to this point, there is no market”.

“We are creating the market now. We [Bulk Infrastructure] are connecting Norway to seven countries direct. With the new privacy rules this is important. This is what we are preparing for.”

He added: “When the first customers come, they actually see we have a market. When one big guy [usually the large hyperscalers such as Alibaba, Google, AWS, Facebook, etc] comes in, it will open up the market to other big guys.

“The establishment of a large player is fundamental [to drive the industry in Norway]. It opens a Pandora box. It would be a grace to get one of those OTTs. And they would also encourage the build of more networks.”

As Sweden boosts a large hyperscale footprint with investments from AWS, Google, Facebook and others, panellists agreed Sweden has succeeded in opening itself up to world.

Gyland said: “Compared to Sweden] we have to work harder. We are getting support from local government, and the work done over the years proves they are willing to help, but there is work to be done.”

Being the only Swedish natural sitting in the panel, Charlie Timmermann, VP IT Division Nordic Baltic Zone, Schneider Electric, explained what has made Sweden a desired data centre destination.

He said: “What Sweden has done that is successful is that they understood is not about tax reduction; it is about changing the data centre industry to become a business.

“Sweden understood the importance of the data centre sector. It is not just about taxes, it is about facilitating the business landscape. And Denmark has done that too.”

Concluding the session, Korshavn sent out another waring to the Norwegian government: “No one will choose Norway when they can risk a hundreds of millions of kroners property tax a year.

“You could be taxed for servers inside the data centre. The government is creating out, get rid of it, and you will see those guys flowing in.”