15 thoughts on “Russia, The Final Frontier For Data Centers?”

  1. Om, what RU lacks in pipes is more then compensated by oversupply of KGB/FSB capacity. Its fantastic idea to do massive investment into physical and therefore unmovable assets over there, so that “power block” officers and their relatives can take it of your hands when the job is done.

    “The true ownership structure is not disclosed, isn’t it?”
    “…These are not the presidential administration members; these are their relatives, high-placed people. There are individuals among them, all relatives, from FSB or SVR.”

  2. I love the Russian People, but I hate the Russian government more than I my own government, and that is speaking a lot since my government consists of the Bush Administration. I would would even rather build within China given their level of government corruption, pollution, and lack of freedom, before I consider Russia.

    Russia’s Government = to much corruption

    Just my opinion.

  3. It is hard to imagine companies making not only substantial capital investments but also placing sensitive personal data on the soil of a country which lacks basic respect for individual and corporate property rights.

    Want power? There are plenty of other places.

  4. Andrew,

    You mean to say the same American companies that have had no qualms about investing in China and spending billions with little to show for it, compromising their own ethics will have problem with Russia.

    Will they have problems with one of the fastest growing Internet economies, mobile economy and most importantly country sitting on a sea of oil (hence with money to spend)?

    You might be idealistic, and I might be too cynical, but in the end “money” always make people decisions that quite match our expectations.

  5. The point about China is valid, but China has shown that capital investment is protected (so far). It may not be free, but it isn’t the kleptocracy of Russia. Investment is protected in China (again, for now, that can change overnight) though folks like Jerry Yang must have a hard time sleeping at night.

    China is also a special case where the market is so big and valuable that it cannot be ignored. Russia, other than oil and minerals, has a dramatically declining population, skyrocketing alcoholism and in general has no productive future in a knowledge economy.

  6. I too don’t think building datacenters in Russia is a good idea. I’d rather have them on the bottom of the ocean, Alaska, North Pole, whatever… It will be cheaper in the long run.

  7. Russia is a fantastic option for data centers placement. US will bring jobs to Russia. Your JV can own or lease data centers. If not within city limits of major cities – it is cheap. I would not worry about government corruption especially as it comes to data centers. I help US companies establish their presence in Russia – wither it is internet or retail operations. My last project – I helped Starbucks to open retail locations in Moscow, JV set up, partner and vendor selection. Moscow is the toughest city to get in with small box retail operations. We had trademark issues to solve there as well and work with Moscow governor Luzhkov’s administration. I worked closely with US Commercial Services in Moscow and US Chamber of Commerce. They are great in assisting US companies. Russia is a fantastic market for tech industry. Do not worry about corruption – find an experienced person with strong ethics to run project and speak on your behalf – and benefit from great opportunities Russia offers.

  8. There is no way that I would ever allow my data to physically reside in Russia, at least in it’s current manifestation. You don’t need to look far [1] to understand what an investment in Russia entails. The worst of being physical assets.

    If you’re looking for cheep power there are many, many more viable options than even considering undertaking a feasibility study. In short, just say no to Russia.


  9. Olya,
    strong ethics run for as long as the money in the feeding hand. As soon as money run out so is the ethics. I’ve been working with too many people from Russia to back up this claim. Twice the same goes for anybody who has any power whatsoever. Obviously, higher risks investing in Russia produce (hopefully) higher returns, but risks lately have gone way too high.

    As to the data centers – I would not even put my cat’s name and age in any of those if they are on Russian soil.

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