In my native Sweden, many people experience a sense of negativity this time of year, when the cold winter weather has the country in a firm grip. We begin to dream of life (or at least a holiday) in warmer countries as we walk the streets, shivering against the cold. Our cold climate, however, gives us a huge advantage in this age of digitalisation, by enabling us to operate data centres at a lower cost. This is because the process of keeping the equipment cool requires less energy.
That’s one of the main reasons as to why several large-scale data centres have been built here in recent years, with more to come. Global giants such as Facebook, Microsoft, Amazon and Google are among the companies reaping the benefits. The presence of conditions such as the relative simplicity of cooling and cheap electricity can be seen to increase the likelihood that major global organisations will continue to build and operate data centres in Sweden. The fact that Sweden is a politically and geographically stable country further strengthens this likelihood.
We also have a reputation for being leaders in technology innovation, which is reflected in the European Commission’s Digital Economy and Society Index 2018, where Sweden is ranked in the top 3 most advanced digital economies in the EU. New and ongoing developments in IoT (smart cities, autonomous vehicles) through to becoming a cashless society mean that companies, government organisations and their partners, suppliers and customers need to be able to seamlessly interconnect to support the digital transformation required.
In fact, two out of three Swedish CIOs think that interconnection will become increasingly important in the next three years, according to a local survey performed to support the Global Interconnection Index, Vol 2(the GXI) recently published by Equinix. The GXI is our annual report which tracks, measures and forecasts the explosive growth in digital business.
Examples of rapidly growing Swedish companies range from global giants from gaming and media industries, to local big brand names such as fintech company iZettle and Axfood (Sweden’s second largest food retailer). The shift to a digital edge strategy on Platform Equinix enabled Axfood to scale its digital business, keep pace with shifting markets and find new growth opportunities.
In addition to the industry-specific solutions, there is also a need for the efficient management of direct connections for more general applications, such as e-commerce, IoT and big data analytics. In simple terms, wherever the volumes for data are increasing and data management is becoming more advanced, there is a need for better and faster solutions for the transferring of data.
The unprecedented data growth generated by these innovations such as smart cities will place huge levels of strain on legacy digital infrastructures. To handle this influx, it is imperative that we begin to develop digital infrastructures that can seamlessly handle not just our current data demands, but also the growing demands of the future.
Equinix is now driving this development with the new SK2 hub, which will shortly become operational. This represents a focal point for the prioritised data traffic that is essential for the interconnection and digitalisation our customers require.
A number of Swedish technology companies (in the finance industry, for example) are already involved in this development. A better infrastructure – such as Equinix’s three data centres in the Stockholm area – increases the possibility of creating new, digital solutions. This also means job creation relating to the construction and operation of data centres, as well as the generation of diverse forms of income for the Swedish economy.
 Another reason for global giants choosing Sweden is the legislation passed in 2017, stipulating that the Swedish energy tax for data centres has been reduced by 97 percent. This represents an annual cost saving of between 1.6 and 2.7 million dollars for a 10-megawatt data centre. The tax reduction applies to server owners in data centres with a capacity exceeding 500 kilowatts, which means that our larger customers can apply for a tax relief. An additional bonus is that the electricity used in the data centre generates an almost non-existent carbon footprint.