Iceland could become a green hub for global cloud computing

Iceland is in a bit of trouble these days, its economy collapsed last year when its three largest banks failed. And so now it is being bailed out by the International Monetary Fund and trying to get its economy on an even keel. One of Iceland's most valuable resources is tremendous amounts of green energy from hydro-electric and geothermal sources. It's got the cheapest electric power in the world. But that's not very useful sitting in the middle of the Atlantic, you can't run power lines thousands of miles through the ocean. If you want to make money from all this cheap, green electric power you have to convert it into something that you can easily transport. For Iceland, that means converting electric power into aluminum because smelting aluminum requires massive amounts of electric power. But smelting aluminum is hardly a green industry. The irony is that Iceland takes green power and pumps it into one of the most polluting industries you can find, one that also affects the health of local populations. Part of the government's stimulus package is to build more green power generators and smelt more aluminum. But such policies are becoming unpopular among the population because of the environmental damage and because few jobs are created.

The web site Saving Iceland reports that earlier this month:

...three black dressed individuals, masked with aluminium foil, threw green Skyr (traditional Icelandic dairy product) on representatives of Icelandic energy companies during a greenwash presentation in the University of Iceland.

Skyr Thrown on Greenwashing PR Managers

[Throwing Skyr is a traditional way for Icelanders to communicate disrespect and disapproval.]

Why convert power electrons into aluminum atoms and the pollution that goes along with that process? Why not convert power electrons into data electrons? They are certainly much easier to transport. Iceland sits in a great location, half-way between North America and Europe and it is sitting on several high speed data lines connecting the two continents. Iceland could be the site for massive data centers providing cloud computing services. Since the cost of electric power is one of the largest operating costs for data centers, keeping those costs in check will be vital for the success of cloud computing providers. Which means Icelandic data centers start off with a massive competitive advantage. And bandwidth is not the issue because you can improve network efficiency far more with clever technologies such as those from Riverbed, than with building local data centers to try and limit latency issues.

Two years ago I suggested Google should build its data centers in Iceland because of all the nearly-free green geothermal energy. Today the same arguments apply to cloud computing data centers.

The Invest in Iceland Agency has put together a few web pages and a pdf to try and drum up interest in data centers [Please see Iceland: The coolest location for data centers.] So far no bites. But if the government of Iceland adopted a stimulus policy based around cloud computing rather than making more aluminum, it would be a better use of green energy, and it would create high quality jobs, imho. Here is my suggestion: Iceland has a unique opportunity to become a large hub for cloud computing. It has the cheapest electric power in the world, on top of that it is green power. In most parts of the world green power such as solar, wind is more expensive than nuclear, coal, oil, and natural gas generated power. Iceland should acquire a few tech companies such as Riverbed for its network technology and start building an economy around being the lowest cost provider of cloud computing services. It'll create huge numbers of high quality high paying jobs and lay a foundation that will last for a long time. Cloud computing is in its infancy but it is the most significant computing platform of the century (so far...). That won't change in a hurry. Dump the smelters! Build data centers! - - - Please see:

Or maybe Google should just buy Iceland. It would double its GDP; Google could rename the Kroner the Gollar; the Googleplex and a bunch of data centers could be moved to Iceland; Googlers would love all the outdoor activities, the long summer days and the surprisingly mild climate; it could end Icelandic whaling; Larry and Brin could take turns being king and queen; and any pesky anti-trust lawsuits would just be pesky and of no consequence.

Could Troubled Iceland Find A Silver Lining In Cloud Computing?

Saving Iceland » More power plants may cause more economic instability

Saving Iceland » The Hall of Shame

Google Invests in Geothermal Energy « Data Center Knowledge

Invest in Iceland Agency - Information centre for foreign investors investing in Iceland