The Data Centre Risk Index (DCRI) evaluates the top risks likely to affect the successful operation of a data centre in the 20 most important global markets.
"The underlying value of a data centre lies in its infrastructure. Data centre owners can mitigate risk by ensuring their facilities have the capacity to meet current demand for services as well as the flexibility to meet future demand, in terms of technological advances and changing operational requirements," said Cushman & Wakefield Executive Director - Occupier Services Tom Pullinen.
"If an appropriate balance of capacity and flexibility is achieved at the development stage the data centre asset can be effectively future-proofed," he added.
The ranking focuses on three key parameters of energy cost, international bandwidth and ease of doing business, which carry a 60% weight in the analysis. Five other factors - corporation tax, cost of labour, political stability, sustainability and natural disasters - account for a further 35% and GDP (per capita), inflation and water availability account for the remaining 5% weight.
The demand for data storage capacity, accelerated by recent advances such as cloud computing, means that more companies are now investing in data centres internationally. The DCRI allows companies to not only identify and mitigate risks across each of the 11 parameters as they move into less familiar locations but the weightings can also be tailored to reflect the relative importance of each key parameter for a specific company. Thereby providing a personalized assessment.
In the overall rankings the US comes out as the lowest risk country, primarily owing to relatively lower energy costs and a favourable business environment. It is followed by Canada and Germany.
Six countries from Asia Pacific (excluding Qatar) are evaluated, with Hong Kong ranking 4th, Australia 10th and Singapore 11th.
In the overall rankings Hong Kong came out on top in the Asia Pacific region, scoring highly on international bandwidth, ease of doing business, corporation tax and cost of labor. Australia also performs well on most aspects with relative strength in GDP per capita, political stability, water availability and energy costs. Singapore, placed 11th in the composite ranking, is the topmost country for ease of doing business and also scores well on corporate tax, cost of labor and GDP per capita.
While the economic powerhouses of China and India placed lower in the rankings (18th and 20th respectively) they score ahead of most others countries on sustainability and cost of labor. Their lower ranking reflects relatively weaker performance on the three high-focus parameters of energy cost, international bandwidth and ease of doing business. Similarly, Japan is placed high for political stability and inflation but its overall ranking of 19th is a result of relatively higher energy costs and historically greater exposure to natural disasters.
Stephen Whatling, Global Services Director at hurleypalmerflatt, said: "Despite their status as engines of global growth, China and India score poorly as a result of strict foreign ownership regulations and other barriers to investment."
Arvind Nandan, leader of the Data Centre Practice Group for Asia Pacific at Cushman & Wakefield further commented: "As the world's leading emerging markets both China and India are destinations of choice for international business and locating a data centre in or near these countries is a commercial necessity for many companies. While China and India ranked lower they scored highly in areas of increasing importance to business, such as sustainability. With significant infrastructure investments being made by governments to support each country's rapid development and with continual progress being made to ease strict foreign ownership regulations, it is expected both countries will fast track up the rankings in future years over more developed countries, leading to real commercial opportunities now as the investment climate becomes more favourable."
By creating more partnerships for government and private investment in bandwidth and power infrastructure, it is expected that China and India will witness a higher demand for international data centre space, geared to meet data storage and cloud computing models.
Data Centre Risk Index risk categories:
- Energy (cost per kWh)
- International bandwidth (megabyte per capita)
- Ease of doing business
- Corporation tax
- Labour
- Political stability
- Sustainability
- Natural disasters
- GDP per capita
- Inflation
- Water (availability per capita)
Source: Cushman & Wakefield
