Nemertes Impact Analysis:

Verne Global is building a data center in Iceland to provide colocation services. Situating in Iceland provides a power cost of $0.04 per Kilowatt-hour – ¼ to 1/5th the power cost in New York and London – and plenty of it. Verne Global will provide power density to support 20 to 60 KW/rack.

Currently, approximately 87% of enterprise data centers support a power density less than 11 KW/rack. This is an issue as virtualization drives higher density servers replacing lower density servers. Verne Global’s high density power does come at a price: Latency projections are 18 msec to the UK and 36 msec to the USA.

Impacts:

Enterprises: Assess your power density early in your virtualization planning process.

Vendors: Opportunity for Active Power (NASDAQ:ACPW), APC (EPA:SU), Eaton (NYSE:ETN), Emerson (NYSE:EMR), and privately held Pentadyne to work with enterprise to reengineer rack power density.

Investors: Competitive threat to Equinix (NASDAQ:EQX), Navisite (NASDAQ:NAVI), TeleHouse (ETR:DIP) and privately held Fortune Data and Telx.

Ted Ritter, Senior Research Analyst

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