Data Centers are 100% more profitable in Iceland than in the USA
- according to an International Business Cost study by KPMG Consulting

Iceland is the lowest-cost country in Europe and the most competitive location for large International Data Centers according to an International Business Cost Study conducted by KPMG. Iceland has the lowest business cost among all the ten countries presented for nine of the fourteen operations examined, including all software and R&D operations. AFE  is very pleased with the study outcome and is actively working on developing the Internet Data Center industry in Iceland in co-operation with local and foreign companies. To evaluate the feasibility of specific projects in Iceland the agency welcomes co-operation with international companies.

Operational parameters The data center operation modeled in the study represents a 54.000 square feet (5.000 m2) facility with 40 employees, is located in a suburban are on a 3 acres site, and has annual sale at full production of US$ 15 million. Initial investment is estimated US$ 15.3 million, equity is 40% of project cost and the monthly consumption of electricity is 3,456,000 kWh.

Operational findings In comparison with data centers located in the USA, Iceland is found to have about 50% lower wage and salary cost, about 50% lower utility cost, 50% lower interest and deprecation cost and over 20% lower tax payments. The study also shows that accumulated 10-year net profit for the operation in Iceland would be 100% higher than if the operation would be located in the USA. More information on operational parameters and study findings can be downloaded here…

Connectivity Due to its complexity, the cost of bandwidth is not taken into account in the study. Additional connectivity with new fiber-optic submarine system (FARICE) connecting Iceland and the UK will be completed before the end of 2003.  This submarine system will create new and interesting bandwidth options for large IDC located in Iceland.