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Russia, The Final Frontier For Data Centers?

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Updated: To paraphrase (and mangle) StarTrek’s famous tagline: Can Russia be the place where Internet companies boldly go looking for the final frontier of data centers? At least one blog thinks so, and it points to the massive hydroelectric power capacity on tap in Russia. An article in this week’s The Economist points to RusHydro, a Russian company with the capacity to produce 25 gigawatts of electricity.

Much of the unused part is in Russia, RusHydro says. It has 5GW of new capacity under construction and more than 20GW on the drawing board—enough to double production.

Power is seen as the biggest constraint when it comes to building data center capacity. As a way around this conundrum, large consumers of Internet data center capacity have located their facilities closer to energy sources. For instance, Google, Microsoft, and Yahoo have built data centers in Quincy in the state of Washington near a hydroelectric dam where they pay a lot less for power than, say, in Silicon Valley. Google has built a massive facility in The Dalles, Oregon, another location close to power source. (Related stories: The Geography of Internet Infrastructure and Why Google Needs Its Own Nuclear Plant)

From that perspective, it is not so far fetched to imagine that these and other companies could plan on building data centers in Russia. Microsoft has already made its intentions very clear and is planning a data center in Siberia. Google has been slowly expanding its presence in Russia including a recent purchase of Rambler for $140 million. Of course, the big problem is a lack of massive Internet backbone pipes in and out of Russia, but that might be an issue that could be addressed easily.

Why? As we have noted before, there is a lot of capacity being built across the Pacific Ocean. Earlier this week, a new 570 km cable with a capacity of 640 Gbps between Russia and Japan went live.The cable is a joint venture between TransTelecom Company CJSC of Russia, which has about 55,000 kilometers of backhaul network in Russia. The other partner in this cable is NTT. Similarly, Eastern Europe is seeing big build-outs when it comes to fiber to the home (and/or premises). These networks needs backhaul pipes leading to big network upgrades.

I think the reason is that Russia’s natural environment makes it a good candidate for big data center expansion. There are some folks who have come up with ways to leverage natural environments such as cold weather to lower the amount of power required to cool a data center. Andrew Hopper, head of Cambridge University Computing Lab, has been preaching the mantra of putting data centers next to power sources, since it takes “electrical transmissions costs out of the equation.”

Google Data Centers Around The World Map Courtesy of Pingdom. Our source tell us that not all locations on the map qualify as data centers. Instead, some of them are data centers and others are smaller locations that route traffic to “real” data centers.

15 Responses to “Russia, The Final Frontier For Data Centers?”

  1. Olya,
    strong ethics run for as long as the money in the feeding hand. As soon as money run out so is the ethics. I’ve been working with too many people from Russia to back up this claim. Twice the same goes for anybody who has any power whatsoever. Obviously, higher risks investing in Russia produce (hopefully) higher returns, but risks lately have gone way too high.

    As to the data centers – I would not even put my cat’s name and age in any of those if they are on Russian soil.

  2. Alexander Sicular

    There is no way that I would ever allow my data to physically reside in Russia, at least in it’s current manifestation. You don’t need to look far [1] to understand what an investment in Russia entails. The worst of being physical assets.

    If you’re looking for cheep power there are many, many more viable options than even considering undertaking a feasibility study. In short, just say no to Russia.


  3. Russia is a fantastic option for data centers placement. US will bring jobs to Russia. Your JV can own or lease data centers. If not within city limits of major cities – it is cheap. I would not worry about government corruption especially as it comes to data centers. I help US companies establish their presence in Russia – wither it is internet or retail operations. My last project – I helped Starbucks to open retail locations in Moscow, JV set up, partner and vendor selection. Moscow is the toughest city to get in with small box retail operations. We had trademark issues to solve there as well and work with Moscow governor Luzhkov’s administration. I worked closely with US Commercial Services in Moscow and US Chamber of Commerce. They are great in assisting US companies. Russia is a fantastic market for tech industry. Do not worry about corruption – find an experienced person with strong ethics to run project and speak on your behalf – and benefit from great opportunities Russia offers.

  4. I too don’t think building datacenters in Russia is a good idea. I’d rather have them on the bottom of the ocean, Alaska, North Pole, whatever… It will be cheaper in the long run.

  5. The point about China is valid, but China has shown that capital investment is protected (so far). It may not be free, but it isn’t the kleptocracy of Russia. Investment is protected in China (again, for now, that can change overnight) though folks like Jerry Yang must have a hard time sleeping at night.

    China is also a special case where the market is so big and valuable that it cannot be ignored. Russia, other than oil and minerals, has a dramatically declining population, skyrocketing alcoholism and in general has no productive future in a knowledge economy.

  6. Andrew,

    You mean to say the same American companies that have had no qualms about investing in China and spending billions with little to show for it, compromising their own ethics will have problem with Russia.

    Will they have problems with one of the fastest growing Internet economies, mobile economy and most importantly country sitting on a sea of oil (hence with money to spend)?

    You might be idealistic, and I might be too cynical, but in the end “money” always make people decisions that quite match our expectations.

  7. It is hard to imagine companies making not only substantial capital investments but also placing sensitive personal data on the soil of a country which lacks basic respect for individual and corporate property rights.

    Want power? There are plenty of other places.

  8. John Doe

    I love the Russian People, but I hate the Russian government more than I my own government, and that is speaking a lot since my government consists of the Bush Administration. I would would even rather build within China given their level of government corruption, pollution, and lack of freedom, before I consider Russia.

    Russia’s Government = to much corruption

    Just my opinion.

  9. Om, what RU lacks in pipes is more then compensated by oversupply of KGB/FSB capacity. Its fantastic idea to do massive investment into physical and therefore unmovable assets over there, so that “power block” officers and their relatives can take it of your hands when the job is done.
    “The true ownership structure is not disclosed, isn’t it?”
    “…These are not the presidential administration members; these are their relatives, high-placed people. There are individuals among them, all relatives, from FSB or SVR.”