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With Data Center Risk, U.S. at One End, India and Brazil at the Other

Published
  • May 28 2013, 2:30pm EDT

May 28, 2013 – The U.S. remains the top spot for data centers in terms of avoiding risk, while huge emerging markets in India and Brazil carry considerable baggage with housing data, according to the latest annual report from real estate advisory Cushman & Wakefield.

The index consists of 30 countries based on established data center locations and growing markets (which, geographically, cuts much of Africa, the Middle East and Western Europe from the firm’s index). Countries were ranked and split across three levels of risk – low, medium and high – along a weighted scale of factors including ease of conducting business, natural disaster threats, energy cost and security, and tax and labor.

The U.S. retained its top ranking by the real estate firm, where it may remain for at least the foreseeable future due to strong infrastructure and “several” large centers going online over the next couple of years. Hurricane Sandy’s impact to data operations on the East Coast last year put a finer point on backup and colocation efforts. Looking at the bigger picture, the report noted the the “critical point-in-time evaluation” that enterprise IT leaders are making in the face of demands on security, backup and cloud deployments. The report authors summarized: “Capital expenditures and operating expenses are being squeezed at the same time that increased redundancy, security and accessibility of network and critical systems are being required. This is prompting strong demand for colocation data [centers], as public and private cloud-based storage and backup providers emerge as viable solutions for outsourcing although organizations continue to struggle with security and access issues.”

Rounding out the top five were the U.K., Sweden, Germany and Canada. Along with India and Brazil at the bottom were Mexico, Indonesia and, in a large drop from last year due to damaged infrastructure and threats of natural disasters, Japan.

India registered poorly on its dependence on imported oil and lack of diversified energy prospects, though the build-out of the retail data center market in the country puts India as an “attractive” long-term data center investment. Brazil, too, is anticipated to improve its ranking, after some infrastructure improvements from 2013-15, and with acceleration of investment ahead of international sporting events such as the Olympics and World Cup.

Singapore ranked as the easiest nation in which to do data center business. Qatar had the cheapest energy costs and the U.S. had the best bandwidth. China, which came in at 25th overall, is expecting to undergo drastic changes, with forecasts of 20 percent annual growth over the next five years. Even with that intense investment, the real estate survey indicates that licensing issues will continue to put up a barrier for foreign investors, leading to additional layers of partnership or management.

To register for the 2013 “Data Centre Risk Index,” click here.

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