After the Nokia deal, Microsoft promised a $250m datacenter for Finland. So where is it?

When it acquired Nokia's devices business, Microsoft said it would invest $250m in a new Finnish datacenter. A year and a half later, has anything happened?
Written by Liam Tung, Contributing Writer

Last year, Microsoft spent billions of dollars on new datacenters around the globe, but a $250m facility scheduled to be built in Finland is yet to see the light of day.

In September 2013, Microsoft announced the plan for a new datacenter in the country as part of the deal to acquire Nokia's devices and services business. The $250m facility was to be "the home for a datacenter that will serve Microsoft consumers in Europe," Microsoft said, signalling the Finnish site would join the massive datacenters that Google and Facebook have already built in the Nordic region.

A year and half later, however, construction of the planned Microsoft datacenter doesn't appear to have begun, nor has the company broken the seal on the $250m it said it would spend "in capital and operation of the new datacenter over the next few years, with the potential for further expansion over time".

The lacuna hasn't gone unnoticed in Finland. Microsoft last year opened a reportedly small datacenter at an undisclosed location in the Uusimaa region in southern Finland but it's unlikely to be on the same scale as Google's and Facebook's Nordic datacenters. The Uusimaa region plays host to Espoo, the location of the former Nokia offices that are now Microsoft's local headquarters.

In January, Finnish PM Alexander Stubb told local media the government was still negotiating with Microsoft over the datacenter, but wouldn't be drawn on a possible location for the facility. "We're working all the time with Microsoft and we must continue to do so," Finnish broadcaster YLE quoted Stubb as saying. Stubb's office did not respond to request for comment.

Microsoft is remaining equally quiet on the $250m plan. When questioned about the promised Finnish datacentre, the company told ZDNet: "We announced in fall 2013 that we would invest in datacenter capabilities in Finland. Microsoft is committed to its datacenter investment in the Uusimaa region and the ongoing expansion of capacity, in response to customer demand and market conditions. Services are hosted from this datacenter now, and will be in the future.

"We have no other information to disclose at this time. Additionally we do not disclose information about all of our locations to ensure that a high level of security for our customers' data is provided."

Microsoft declined to comment on whether the $250m facility will still be built, and if any construction work has begun on it. However, the language Microsoft is now using around its datacenter estate in Finland - "invest in datacenter capabilities" - is a departure from its previous pronouncements.

Steve Ballmer, CEO of Microsoft at the time of the Nokia acquisition, was very clear when he said in September 2013 that Microsoft had "selected Finland as the home of a new datacenter for Microsoft that will serve consumers throughout Europe. That will represent an investment of over $250m in capital and operations over the next few years."

A major Microsoft datacenter would be a big deal for Finland, given the government's desire for the country to become a safe haven for data in Europe.

While much has been made of the advantages of locating a datacenter in north of Europe, Finland has disadvantages compared to rivals like Iceland and Sweden when it comes to power, given its heavy reliance on Russia for energy. And secondly, and potentially more seriously, it's dependent on Sweden for international bandwidth.

To that end, the Finnish government has partly funded a 1,100km submarine cable for carrying superfast broadband from Helsinki to the Rostock-Ribnitz area in northern Germany. Construction has started on the cable but the new link, with a planned capacity of 15Tbps, won't be completed until 2016.

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