New Global Data Centre Risk Index Launched

15 Jun, 2011, London

International consultancies Cushman & Wakefield and hurleypalmerflatt have issued a new study evaluating the risks to global data centre facilities and international investment in business critical IT infrastructure.

The firms have carried out a joint study evaluating risk in 20 leading and emerging markets and across key regional centres. The study identifies a weakness in industry decision-making processes and argues that companies should be evaluating their risk across a greater number of criteria and locations and mitigating or managing certain risks before investing in data centres.

According to the Data Centre Risk Index, published today by Cushman & Wakefield and hurleypalmerflatt, the demand for data storage capacity, accelerated by recent technological advances, means that more and more companies are investing in data centres overseas and potentially increasing their exposure to risk.

Data centres support business critical IT systems and any downtime can cost millions in lost revenue and even threaten the viability of a business. The Index highlights the impact on business continuity resulting from extreme acts of nature – as witnessed in Japan, New Zealand, Iceland, USA and Australia – and political instability following the unrest in North Africa and the Middle East.

The Index ranks countries according to the risks likely to affect the successful operation of a data centre and also identifies factors such high energy costs, poor international bandwidth and protectionist legislation as major risks (see risk categories in notes to editors).

The U.S. ranks first in the index, with the lowest risk for locating a data centre, reflecting the low cost of energy and its favourable business environment. It is followed by Canada in second position, and Germany, in third.

Stephen Whatling, Global Services Director at hurleypalmerflatt, said: “Despite their status as engines of global growth, China and India score poorly as a result of strict foreign ownership regulations and other barriers to investment.

“Brazil is a key emerging market, currently enjoying substantial growth and attention from foreign investors. With improvements in international bandwidth and infrastructure and tax reforms for non-domiciled companies, Brazil could emerge as a Latin American technology powerhouse.”

Keith Inglis, Partner at Cushman & Wakefield, said: “Sweden, Qatar and South Africa are untapped markets and attractive locations, although requiring further investment in infrastructure.

“Meanwhile high corporation tax, energy and labour costs in the United Kingdom mean there is a risk that owners and operators could begin to look overseas to reduce overheads.”

Notes to editors

Data Centre Risk Index risk categories:

- Energy (cost per kWh)

- International bandwidth (Mbit/s)

- Ease of doing business

- Corporation tax

- Labour

- Political stability

- Sustainability

- Natural disasters

- GDP per capita

- Inflation

- Water (availability per capita)

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