Imagine a small country, isolated in the middle of a vast ocean. Imagine it covered in green grass and with lots of glaciers and fiords. Now add in a relatively small, yet well-educated population, good social cohesion, respected democratic structures and processes and more than its share of innovation.
Of course, you’d assume that I’m talking about New Zealand. Except I’m not. Rather I’m thinking of another, similar country as far away from New Zealand as it is possible to get.
A few years I had the good fortune to be invited to speak at a conference in Iceland. In my keynote address, I waxed poetic about the similarities between the two countries. They have Bjork and we have Dave Dobbyn. Essentially the same thing, right?
But beyond music, we share some other traits. We’re both a long way from our trading partners. We both have relatively small populations. We both have economies traditionally based around primary production and we both, through the vagaries of meteorology and tectonics, have copious quantities of renewable energy that can be tapped.
And we’re both trying to get a handle on what our place is in the “weightless economy.” It’s not binary, and I’m certain that Iceland will continue to send its traditional delicacy, Rotted Shark (truth. Google it!) all around the world but increasingly the provision of such an acquired delicacy will be augmented by selling other things.
In its case, Iceland has become a world leader in the provision of data centre services. Iceland may be isolated, but it’s only a few milliseconds from Reykjavik, its capital, to mainland Europe and the East Coast of the USA. Add to that the fact that Iceland is completely powered by renewable energy, and you have an ability to power energy-intensive data centres in a low carbon way.
Over the past decade or two, Iceland has seen huge investment in building out its data centre capacity and is increasingly attracting large companies who want an alternative hosting option beyond those in mainland Europe or the US.
And it seems that New Zealand is finally going the same way, after years of industry insiders suggesting it was a good way forward. A bunch of high net worth individuals are planning a huge data centre project in Southland, perfectly timed and located to take advantage of the clean, green energy provided from the Manapouri dam and potentially no needed in the future for the Tiwai Point aluminium smelter. It’s a $700m project and aims to attract some big customers.
The politicians have, understandably, been positive but a little tentative in discussing this plan. It’s a big project and there are plenty of barriers to overcome to see it reach success. No politician worth their salt would be seen dead talking up a project that may not actually happen. But the opportunity to produce an answer to the gaping hole that Rio Tinto’s potential shuttering of Tiwai Point is huge. Energy Minister Megan Woods commented that:
We’re interested in seeing what ideas come forward as part of the region’s transition plan, especially with Rio Tinto looking to eventually exit its operations at Tiwai.
This project, if it sees fruition, would be the first “hyperscale” facility in the country. Hyperscale is the term that industry insiders use to mean really, really big. This being the technology industry, however, buzzwords are a requirement. Suffice it to say that this facility would be orders of magnitude bigger than anything else currently in the country. There’s every chance that the facility would mean that we’d have locally-hosted offerings from the global cloud players (Amazon Web Services and Google, for example).
And so we have, in stark contrast, a reflection of the old economy and a glimpse of the new economy. On one hand, a facility with a massive footprint, reliant on huge supply chains in both directions (taking raw bauxite from Australia and shipping aluminium products around the world), and one which plays in essentially a commodity market. On the other, we have a facility that, once built, leverages the “weightless economy,” shipping data all around the world in a heartbeat and unlocking a world of new business approaches. There’s every chance that the next (or even this!) Xero, Uber or TradeMe will be created through leveraging the resource this facility offers.
Don’t get me wrong, I’m not one of those hand wavers suggesting that New Zealand should give up doing everything it always has, heck, my business, Cactus Outdoors still makes clothing and other sewn products here in NZ. But what we should do is reconsider our reliance on commodity products and seek opportunities, such as the SOuthland data centre one, which allow us to play in a higher-value space.
