Data Centre Risk Index Names Iceland World’s Safest Location

The 2016 Data Centre Risk Index, published by Cushman & Wakefield (C&W), has moved Iceland to the number one position among 37 countries as the safest location for remote data storage, while the United States dropped from the number 1 to the number 10 position. The reasons Iceland rose to the top of the list are several (as described below under “Methodology”), but what it means for key business decision makers around the globe is unmistakable: Iceland is the best country in the world to secure their data. What it means for the clients of companies like OrangeWebsite, located in Reykjavík, Iceland, is added reassurance that their data is safe and protected.

Why Is Remote Data Storage Important?

For companies large and small, unplanned downtime is a cost of doing business. That doesn’t mean, of course, that businesses should (or do) passively acquiesce to the eventuality of downtime. In fact, American businesses spend millions implementing strategies to avoid downtime, from moving operations to the cloud or data centres to training employees to ignore suspicious emails and documents.

What Is the Cost to Business of Downtime?

There’s a good reason businesses spend so much time and money preventing downtime episodes. Downtime means a loss or revenues during the period their systems are down, in addition to lost productivity and damage to their reputations. According to the Data Center Journal, revenue losses due to downtime episodes are increasing exponentially. The average cost per minute of downtime is $7,900, an increase of 41% over a one-year period. The average downtime episode lasts 86 minutes. Doing the math, that’s a cost—on average—of almost $700,000 for every incident of downtime.

What Systems Are Most Affected by Downtime?

Downtime can affect every aspect of business operations, but the two at the top of the list are business applications and technology services. Business applications are those operations which employees access through the company’s internal server to do their jobs. Technology services include email operations, as well as internet and intranet access. Loss of either business or technology applications impacts productivity—and costs money.

The loss of business applications can affect the productivity of every employee, from financial services to marketing to information systems. For example, downtime can bring down CRM operations, making customer communications disorganized at best, or lost entirely at worst. It can also mean the loss of ERP capabilities, eliminating the flow of business information and preventing data-driven decision making.

The loss of technology services, like email and internet access, means employees have reduced access to non-mobile phone and fax machines service. It also compromises use of a company’s intranet, which employees rely on to access and share documents.

The Pervasiveness of Remote Data Storage

Understanding the risks associated with in-house data storage, an increasing number of businesses are looking at remote data storage options, such as remote data centers and cloud computing. For example, a study by RightScale reports that 93 percent of businesses now use cloud services. In another study, Emergent Research predicted that twice as many small businesses will move all business operations to the cloud within 6 years.

Other companies, particularly those which run a wider variety of business applications and have more complex workloads, are opting to store data at remote data centres. Those data centres offer more customized solutions and greater control over their data and equipment, better meeting the needs of large, complex businesses.

The complication for business decision makers is that remote data centers are, themselves, at some risk for downtime episodes. In order to help business owners decide which data centers are at least risk, Cushman & Wakefield each year publishes its annual Data Centre Risk Index. In its 2016 report, Cushman & Wakefield describe the importance of their analysis:

“The index ranks key established and emerging locations by the most appropriate risks affecting data centre operations in today’s current climate. It has been designed primarily to support data centre due diligence and senior decision making when considering global investment and deployment activities.”

Data Risk Index 2016: Methodology

Cushman & Wakefield’s analysis surveys more than 4,000 clients worldwide to rate the relative security of 37 countries along 10 key factors related to data centre risk. These include factors like ease of doing business, natural disaster, energy security and corporation tax, among others. Each factor is weighted based on its relative importance to potential risk, with natural disaster (15.38%) and political stability (12.82%) at the top of the list, and GDP per capital (5.77%) and corporation tax (6.41%) at the bottom.

The methodology employed shifts each year to reflect changing conditions. This year’s report reflects the growing concern among businesses related to political stability, natural disaster and energy security, which have surpassed concerns related to cost and connectivity. As they explain in their introduction:

“Natural disaster and a location’s coping capability ranked as the most important risk factors while political stability ranked second this year, collectively accounting for one third of overall decision making and implying a level of emotional sentiment throughout the survey following a number of major incidents over the past few years.”

Data Risk Index 2016: Key Findings

Among this year’s most significant takeaways are the following:

Iceland was rated the world’s safest data centre location, followed by Norway and Switzerland The United States dropped from the number one to the number 10 position, scoring particularly low in “corporation tax (36th out of 37)” and “international bandwidth (15th of 37).” European countries offer on average the lowest risk environment, taking the top 5 index positions because of low risk for natural disaster and strong energy security ratings Singapore, South Korea and Hong Kong rated highly based on proximity to market, ease of doing business and IT infrastructure, and despite poor ratings for risk of natural disaster The 10 safest countries in the report are:

  • Iceland
  • Norway
  • Switzerland
  • Finland
  • Sweden
  • Canada
  • Singapore
  • Republic of Korea
  • United Kingdom
  • United States

The top 5 riskiest markets for data centers, according to C&W, are:

  • Nigeria
  • India
  • China
  • Turkey
  • Indonesia

Conclusion Businesses which are considering moving their data to a data centre, or moving from one data centre to another, should carefully weigh the conclusions of the most recent Data Centre Risk Index, and especially the particular factors which informed those conclusions.

Founded in 2006 and located in Reykjavík, OrangeWebsite is one of Iceland’s leading web hosting companies, a 100% green company offering top-quality and secure web hosting solutions for clients around the globe. Their servers are in Iceland, and all of their data is stored and protected in Iceland. To learn more about the ways we can keep your company’s data safe and secure, contact us today.

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