fight the horde; sing and cry

Hey, guys. I figured out how to save Iceland’s economy the other day. Just off the top of my head. In case anyone’s curious, or anything; I dunno.

Oh, hi, still here? Okay, good.

Iceland can turn its shattered economy around by transforming the island into a giant server farm.

… no, wait, come back.

This plan sounds insane, of course. But it makes perfect sense for the following reasons:

1. Power Is Cheap. Iceland gets 99% of its electricity from geothermal energy and dams. When you live on an island made of hot springs and glaciers, it’s hard not to find an easy source of power. Drill a hole into the earth and stop when you hit something boiling.

2. Cold Air Is Cheap. Server farms don’t just need electricity, of course. They also need easy ventilation in order to keep the massive racks of computers cool. Fortunately, temperatures in Iceland get no higher than 55° F on average (10° C). And that’s during the hottest portions of July. Forget climate control in your server room: just vent in some outside air.

3. Real Estate is Cheap. Iceland is one of the least densely populated countries in the world (230th out of 238). The interior of the country looks like the moon – so much so that the Apollo astronauts faked practiced lunar exploration on its rocky surface. Build a warehouse in the hills outside Selfoss for pennies.

4. Lots of Overeducated, Unemployed White Guys. The collapse of Iceland’s banks put a lot of college-educated people back on the job market. A few days of retraining, and voila! All the employees you need. Or better yet: don’t bother retraining them. Let them underbid each other. Sit back and take your pick of the most talented / least demanding.

5. Serviced by International Air Travel. Unlike other cold places where real estate is cheap (e.g., the Arctic Circle), Iceland is served by IcelandAir. Icelandair flies to Boston, New York, Seattle, London, Madrid, Stockholm, Berlin, Paris and Amsterdam (as well as a dozen other cities). Basing out of Iceland gives you most of the benefits of a global hub like Heathrow at a sliver of the cost.

6. Not Too Far From The Rest Of The World. Iceland’s only a few hundred miles from the UK, and from there it’s a short hop to mainland Europe. Lay a few fiber trunklines across the North Atlantic and you have a new, reliable connection. The project to lay this trunkline between Iceland and UK should be jointly financed, as a way of mending the bridges burned by the Cod Wars.

So, there’s the business case. Iceland’s a cold, geologically unstable country full of unemployed men: an engineer’s dream. Google or Microsoft could expand their global offerings overnight by buying up the Icelandic interior and turning it into banks of servers.

Questions? Comments? Bids on the initial shares will start at one million dollars euros.

Update: Joel points out that Microsoft and Google looked into building Icelandic server farms in 2007. The problem then, of course, was that 2007 was the peak of Iceland’s investment bubble, when real estate was at its priciest. The plan in 2007 was for Google to buy Icelandic real estate. The plan in 2010 is for Google to buy Iceland.


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