As the energy crisis in Europe continues to spiral out of control, more and more European companies are looking to relocate their data centers abroad. Many are considering Indonesia, which has abundant cheap energy and a stable climate. The companies who choose to relocate their DRCs there can help ease the strain on Europe’s power grid and earn a significant tax break for the following year.
The Challenges Facing European Companies
In the past three years, European countries have seen a marked decrease in the availability of electricity. This problem is attributed to the increased demand for electricity and the aging infrastructure.
Companies are looking for energy-efficient data centers to deliver high reliability and low carbon footprint power to resolve this issue. Many European companies are locating their data centers in Indonesia because of its reliable grid and abundant renewable energy supply.
With the growing need for data centers and server farms, European businesses must face compliance issues of power usage effectiveness (PUE) and energy consumption. Many companies have relocated their data centers to more energy-efficient countries with lower electricity prices to meet these requirements. However, many factors should be considered when choosing a location for a data center’s facility, such as humidity, temperature, and security.
A recent report from DataCentres.org claims that, on average, the cost of running a data center in Europe is 5.5 times higher than in Indonesia. The report further explains that the increased demand for cooling facilities is often overlooked by European companies looking for cheap energy options for their data centers due to a need for more knowledge about the importance of cooling facilities in the Netherlands.
Increased Data Center Costs in Europe
In the last few months, there has been a significant increase in the cost of natural gas in Europe. This has caused substantial changes in the way that many data centers operate. These changes include running the data center more efficiently and switching to alternative fuel sources to keep costs down.
The increased gas prices are a result of the Russia-Ukraine conflict. A significant gas pipeline runs from Russia to Western Europe through Ukraine, and even though the war has not directly impacted it, it has caused an increased demand for Russian gas and therefore caused a price increase.
While Europe is trying to find another energy source, they are also looking at ways to reduce their energy usage to save money on utility bills. Many large companies have already switched to more efficient servers and cooling units but still need to catch up on the energy cost.
Energy costs can quickly become a significant drain on a company’s bottom line, but there are steps that companies can take to manage their energy consumption better. In Europe, data center providers see an increase in costs as the continent pushes toward compliance with new environmental regulations.
These changes have led to the need for additional infrastructure, driving up the cost of power. If a company has already decided to expand or relocate its operations, it’s essential to consider how this will impact its budget and how much it will affect the bottom line.
Disaster Recovery Center to Prevent Downtime and to Meet Business Compliance in Europe.
Many industrial sectors in Europe require business people to have a disaster recovery center (DRC) to maintain their business continuity. Especially for the financial industry and other sectors that provide comprehensive services to the public in Europe and worldwide.
These requirements have become standard in their business. The problem is that DRC is often seen only as a burden before downtime occurs. Coupled with the increase in electricity prices in Europe, which has caused data center operational costs to swell, European business people are starting to look for ways to overcome this challenge.
During downtime, the DRC can become a backup operational site so the business can continue to operate.
We already know that realized losses due to downtime can cost millions of dollars in just 1 hour. For this reason, DRC has become integral to today’s business operations.
Relocation to Indonesia’s DRC is a Low-Cost Option for European Companies
Gas prices in Europe are rising due to the Russian annexation of Crimea and the ongoing conflict with Ukraine. Europe relies on Russia for approximately 30% of its natural gas supply. With the threat of further sanctions from Western Europe, Russia is raising its gas price.
The European Union (EU) has been looking to diversify its sources of natural gas, and Indonesia’s substantial potential reserves make it an ideal place to relocate some of its business operations, such as disaster recovery centers.
There are many reasons why European companies are relocating their data centers to Indonesia. Here are a few:
- The rise of the European Union’s Data Protection Directive is forcing companies to protect the personal information of European citizens.
- It has resulted in the outsourcing of DRCs to less expensive locations like Indonesia.
- The Indonesian government has loosened restrictions on foreign-owned data centers and is actively courting multinational businesses.
Indonesia’s DRC offers an attractive option for companies looking to reduce their operating costs by 40% or more while staying within a region that is expected to experience a high level of growth over the next few years. With Indonesia’s DRC and growing economy, you can keep your operations close to home while keeping your budget under control and your customers satisfied.
Indonesia Has More Skilled Workers and Better Infrastructure Now
Today’s telecommunication infrastructure in Indonesia is much better than ten years ago. The fiber optic cable network that connects Indonesia with several countries has increased bandwidth availability and internet access speed.
Indonesia has established itself as a leader in telecommunications without sacrificing its commitment to privacy. Indonesia was recently recognized as having some of the fastest Internet connections in Asia.
Many European companies have begun to notice that the costs and benefits of locating data centers in Indonesia are more favorable than those provided by other countries. In Jakarta, companies can find affordable, fast-track construction; an abundance of technical talent; and much lower living costs.
The cost of electricity in Indonesia is still more than 50% lower than that in Singapore. Apart from that, many giant data centers are present in Indonesia, such as Google Compute Engine, Microsoft Azure Data Center, and Amazon Web Services. Data center growth continues to occur in Indonesia. In 2023 alone, there will be around ten new data centers in Indonesia.
Several top European mobile application developers have relocated their data centers to Indonesia. Apart from DRC, they use data centers in Indonesia as active servers. With 220 million internet users in Indonesia, placing data centers closer to users is one of the strategies for optimizing business in the digital era.
The need for more data centers is coming soon
With the increasing amount of data being saved, there will be greater demand for more centers throughout Europe. This will be to support the surge in mobile devices and increased bandwidth.
Mobile device usage is on the rise and will continue to do so. The increase in mobile device usage is due to the growing popularity of smartphones and tablets. These devices are capable of storing large amounts of data. The trend in the use of mobile devices has given rise to many new platforms that allow users to access their accounts from anywhere at any time.
Data center costs are increasing because the demand for cloud services is rising, which means more servers will have to be built. Data centers are costly as they require a lot of infrastructure and maintenance expenses to keep them running correctly. The cost of a data center can range from $100 million upwards depending on its capacity, technology used, and location.
It’s not just mobile devices causing an increase in data usage but also social media platforms such as Facebook, Twitter, LinkedIn, and Google+. As these platforms become more popular, we’ll see an increase in data traffic online, forcing companies to build more data centers in Europe.
Data centers are necessary for the proper functioning of many businesses and organizations, which is why there is a constant need for more of these centers. In a report from Gartner, they mention that more data centers will be needed in Europe within the next few years. The other reason there is a need for more data centers is that many of the current ones are being used beyond their maximum capacity.
Conclusion
The increasing need for data centers in Europe presents challenges for business people. Obstructed gas supply has caused electricity costs for the industry to increase drastically, including in the data center industry. This has caused many European companies to plan to relocate their data centers to countries that are more stable and have abundant gas reserves, such as Indonesia.
At the same time, Indonesia is experiencing an oversupply of energy. The problem is that not all European companies are convinced of the quality of data centers in Indonesia, especially regarding environmental issues. Fortunately, data centers in Indonesia have started using gas as their power generator, which can reduce carbon emissions by up to 50%.
In the future, data centers in Indonesia will be even greener, in line with the commitment of the government and business people at the Bali G-20 to reduce carbon emissions by 0% in 2050.
So, it’s time now to relocate your data center to Indonesia. If you are not comfortable with a data center in Indonesia, at least you can migrate your disaster recovery center to Indonesia to fulfill compliance with your business. Downtime is not an option.