Global Data Center Location Insights March 2013 This report is solely for the use of Talent Neuron clients and Talent Neuron Subscribers. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Talent Neuron.
Talent Neuron can help in selecting the right location for datacenter by providing data, analytics and insights on Locations, Talent, Cost, Peer Group Footprint & Trends Location Analysis Understand the capability of each potential location and make data driven decisions on setup and expansion Peer and Talent Insights Understand the capability of each potential location and make data driven decisions on setup and expansion Ecosystem Analysis Understand the capability of each potential location and make data driven decisions on setup and expansion Source: Talent Neuron Website 2
CAPABILITIES Talent Neuron has assisted over 100 companies in their global location analysis and site selection process Ecosystem Insights Forecasts Industry/Domain Wage Inflation Trends Skill Wizard Market Insights Market Tracker Company Tracker 400+ GLOBAL CITIES COVERED Web Crawling Proprietary Data Sources Surveys ZINNOV KEY FOCUS IS ON THE TECHNOLOGY INDUSTRY. OVER 80% CLIENTS ARE IN THE PRODUCT ENGINEERING DOMAIN. Expert Insights Reports Consulting Network TALENT NEURON HAS OVER 90 CITIES IN US AND 12 CITIES IN CANADA FOR EXPANDING IN THE NA REGION Analytics 6 DOMAINS 35 FUNCTIONs 150+ SKILL SETS Source: Talent Neuron Zinnov 3
PROPOSED APPROACH Data Gathering and Analysis through BIG Data Talent Neuron will use data driven Big data principles (for large data analysis) which will provide comprehensive insights and transparency on the trends, current realities and opportunities in any locations Connectors (API / Screen Scraping) 100+ Job sites Patent Databases 3,000+ Company Career Sites Universities Publication/ Journal Databases Technology Contributor lists Hadoop Engine (Big Data Approach) = Over 12,000 Unique Data elements for each city Social Media/ Public Profiles Community Sites Skill Availability Location Insights Compensation and Cost Trends Peer Company Footprint Source: Talent Neuron Website Zinnov 4
Overview of Global Data Centers Forty five percent of all global data centers are located in the US 3% 25% 45% US Canada <1% Western Europe <1% Turkey ~2.5% India <1% ~1.5% Japan ~1% ~1% Hong Kong <1% Brazil Singapore Malaysia ~3% Chile <1% Australia Argentina Western Europe includes UK, Ireland, Switzerland, Germany, France, The Netherlands, Italy and Poland Note: Map is not to scale Source: Talent Neuron, Interviews with Industry Stakeholders 5
Companies typically consider the following Categories to evaluate the locations for data center setup Physical Infrastructure Others Cost Framework for Evaluation Business Continuity Talent Network Infrastructure Source: Talent Neuron Website 6
A comprehensive analysis of the relevant parameters under each category is necessary to ensure the selection of the suitable location Physical Infrastructure Talent Cost Network Infrastructure Business Continuity & Others Operating Cost Natural Disasters Setup Cost War History Accessibility Peer Companies Presence Equipment Cost Transportation Cost Third Party Vendors Government policies Real Estate Location Regulatory Compliance Technicians Network Policies Implementation Connectivity Cost Fiber Cost Recycling Cost (if any) Ease of Replacement and Repairs Network Vendors Environmental Data Security Recycling Facility Cooling Systems Sources Tier 3 level Network support SOC Back-up Costs Amortization Policies Real Estate Costs Domain Knowledge Fiber Terrorism Political Renewable Sources of Power Power Stability NOC Network Support Talent Cooling Costs Power Costs Import Export Costs Existing Data center infrastructure Connectivity Infrastructure Force Majeure Physical Source: Talent Neuron 7
Growing Data Center Market Data center facilities are growing rapidly in emerging locations such as Turkey and Brazil 60% Data Center Facility Growth in Key Global Markets 55% 40% 45% 40% 30% 30% 20% 10% 10% 5% 15% 15% 0% US Canada Brazil Argentina UK Germany Turkey Russia China India Tax incentives, availability of energy and property at subsidized rates for new Data Centers have been driving the growth of Data Center facilities in emerging geographies Source: Talent Neuron, Interviews with Industry Stakeholders 8
Emerging Data Center Locations in Europe Data centers in EMEA locations have helped Internet companies to efficiently serve their customers in the high volume European market England Slough With its proximity to London, Slough is central to businesses making it a strategic geographic location for data center operations The city has dual power supply and high levels of security making it an ideal location for data centers The city is on the hub of the major fiber networks Sweden Luleå Luleå benefits from the country s high redundant power grid with renewable hydropower and highly developed infrastructure Sweden has one of the lowest electricity prices in Europe with Luleå having the lowest electricity prices in Sweden The region has a large number of data center skilled talent with expertise in fields such as distance-spanning technology, long-term digital preservation and lower energy consumption of web technologies Reykjavik Iceland Availability of low cost abundant renewable geothermal and hydroelectric energy makes the country suitable for data center operations. Energy costs in the country is 1/3 rd of energy costs in London. Availability of IT infrastructure talent has been growing in the region and removal of VAT on IT infrastructure has made Iceland more attractive for data center operations Data centers in Iceland also benefit from fresh air cooling cost savings Note: Map is not to scale Source: Talent Neuron, Interviews with Industry Stakeholders 9
Other Emerging Data Center Locations Emerging locations such as Santiago has seen data center investments by companies like Google due to favorable government policies and lower operating costs Chile Santiago Santiago has reliable infrastructure and skilled IT infrastructure talent required for the growth of the data center market Availability of new climate control technology and low cost energy has helped to increase data center investments in the country Favorable government policies and incentives have helped enterprises to emphasize on innovation, which in turn has driven the growth of Internet and data center market in the country Malaysia Canada Singapore Toronto Tax incentives by the local government has decreased the cost of setting up new data centers in Singapore The city has reliable power supply and has skilled data center talent The Infocomm Development Authority of Singapore (IDA) offers incentives to companies covering between 30% and 50% of capital expenses for retrofitting their data centers with new, energy-efficient equipment Data centers in Canada benefit from limited government interference in corporate data which has been a cause of concern for data center operations in US Toronto has a large data center talent pool and has low risk from natural disasters making it favorable for data center investments Proximity to US has also attracted many data center investments in the region Availability of networking and power infrastructure is high in Toronto Note: Map is not to scale Source: Talent Neuron, Interviews with Industry Stakeholders 10
Large Data Centers Outside US Google, Microsoft, Samsung and Yahoo have large data centers outside of US S No. Company Location 1 Samsung London, UK 2 Yahoo Singapore 3 Google Hong Kong 4 Google Santiago, Chile 5 Samsung Gumi, Korea 6 Google Changhua, Taiwan 7 Samsung Beijing, China 8 Microsoft Dublin, Ireland 9 Facebook Luleå, Sweden 10 Google Groningen, Netherlands 11 Google Eemshaven, Netherlands 12 Samsung Gwacheon, Korea Source: Talent Neuron, Interviews with Industry Stakeholders, Company Websites 11
Data Center Talent Pool Availability APAC locations like Tokyo and Hong Kong have a large IT Infrastructure talent pool which makes them favorable for data center operations 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 IT Infrastructure Talent across Key Global Data Center Locations Americas EMEA APAC 13,350 13,750 12,800 6,550 5,300 3,650 3,800 4,100 2,400 1,250 1,600 150 Source: Talent Neuron, Interviews with Industry Stakeholders 12
USD Thousands Data Center Costs Across Various Locations Emerging non-us data center locations such as Amsterdam, Dublin, Singapore and Hong Kong have lower salary costs which help in lowering data center operating costs 180 160 IT Services Salaries across Key Global Data Center Locations Americas EMEA APAC 140 120 100 80 60 40 20 0 Min Median Max Source: Talent Neuron, Interviews with Industry Stakeholders 13
Government Incentives to Data Center Companies Governments often provide tax incentives and lower energy costs to attract data center investments Swedish government provides cheaper energy and subsidies to encourage companies to setup new data centers In Canada, the government offers low taxes, low utility rates and economic incentives for green initiatives In Poland, the government provides cash grants and tax incentives In Australia, some state governments provide longer leasing terms to attract data center companies Few state governments in US provide sales tax exemptions on computer equipment and software Some state governments also provide electricity at lower costs along with property tax exemptions Singapore introduced new tax incentives to help data center operators offset the fixed capital expenditure incurred Source: Talent Neuron Web Crawling and Analysis 14
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