Annual Interview: Estonia's Largest Data Center Celebrates Its Second Year of Operation!

Until a few years ago, Estonia lacked large-scale data centers built to modern standards. When Kert Evert proposed what seemed then like a crazy plan to fill this gap, few believed it would materialize. Skeptics were only convinced by success.

Today, 17 February, we celebrate two years since the ceremonial ribbon cutting at the data center in Hüüru, just outside of Tallinn.

" We serve as the foundation of the e-society. Every country should host at least one such complex," says CEO Tõnu Grünberg, under whose leadership Greenergy Data Centers has evolved from a constructor to an operator and increased its turnover to seven figures.

On the center's anniversary, Grünberg discusses the challenges faced over the past two years, how the arrival of the first large-scale data center has changed the Estonian market, and plans for expansion beyond national borders.

The data center sector has seen rapid growth and technical advancement in recent years. How have expectations for your sector changed?

We're witnessing a focus on environmental sustainability – energy efficiency is at the forefront. As data centers are major energy consumers, every watt saved is important. These facilities are also expected to operate on 100% green energy.

The International Energy Agency recently highlighted data centers in a report on global energy consumption trends. Data centers' energy consumption in Europe, which was between 3-4% in 2022, is expected to exceed 5% by 2026. This underscores the importance placed on sustainability.

Currently, this is still somewhat a matter of conscience, which many data centers, including ours, consider important. However, in the future, energy efficiency will be legislated. From a consumer's perspective, it's critical that facilities comply with norms, standards, and certifications.

Global demand for data centers is increasing, with no signs of abating. Artificial intelligence has slightly changed the game, imposing different demands on data centers: more electricity, more cooling power. This has energized the sector.

Given the global situation, expectations for reliability and security have also risen.

Have you had to make any modifications to meet these expectations?

No. Greenergy Data Centers' facility was built with these demands in mind. We anticipated these developments when planning the data center and can meet all heightened expectations.

How much has Russia's war in Ukraine affected your operations?

Despite being just a few hundred kilometers from NATO's eastern border, we have not experienced significant effects. What is more considered in today's geopolitical climate, and felt in Estonia, is cross-border connectivity. The vulnerability was highlighted last autumn by the destruction of the submarine cable in the Gulf of Finland. Imagine if a company's or country's digital infrastructure was abroad and communication with Estonia was cut off. It would have serious consequences. In this context, it makes sense to keep at least part of the digital footprint in Estonia or at least consider such scenarios.

This has changed to the extent that when building international digital infrastructure, large companies or even countries think more about issues that were previously given less attention.

What role does GDC play in the region today?

We are a solid foundation for the e-society. We are the only large-scale, modern data center facility in Estonia. There are no others like us. Additionally, we have become an important hub for connectivity.

I believe our entry into the market has created additional opportunities for internationally ambitious companies here. Hosting IT equipment with us makes it easier to conduct business in certain areas because we have the necessary certifications and can meet high standards. This can also be seen in reverse – there's now a reason for foreign companies to develop their business in Estonia, as quality is within easy reach.

We have also somewhat changed the market. We brought global top-quality standards here. This has made local IT managers and companies think and see the world differently, broadening their perspective. Everyone who has visited us in the past two years has experienced this wow effect.

For the first time in Estonia, a broader ecosystem or business environment is forming around a data center, where companies located with us create new partnerships and services. In this sense, we are more than just a hosting service provider.

What additional value can you offer the market after two years of operation?

Our team's know-how has matured to the point where we are quite capable of identifying our clients' needs and thinking along with them in finding solutions. It's not just about "here's the floor space, take it." We can understand and calculate different data hosting alternatives, explain what each option means – see the bigger picture. We communicate daily with various organizations, gaining a unique perspective. We see what is needed, where the bottlenecks are, but also the blind spots that are not noticed.

We have built a unique repository of experiences and knowledge within our team. Today, we have a team focused on data center operations, understanding the nuances of this business and continuously learning.

What were the most important goals for the first two years? Were they achieved?

Quality is something we can't overlook. We promised to maintain service availability at 99.982% of the time and have kept that promise – the service has been 100% available. This is a cause for celebration.

We have also significantly increased our turnover and continue to onboard new clients. In other words, we are progressing according to our business plan.

Two years ago, your facility was relatively empty. What is the situation now?

Our building is modular, meaning the exterior is complete and systems are in place, but there's still free space in the areas designated for server rooms. We're building this out in phases according to market needs. Initially, we developed one third.

We're facing a positive problem – the developed space is running out. So, we're in a phase of internal expansion, successfully applying our previous construction experience. This does not interfere with daily operations.

What have been the biggest challenges?

The biggest challenge was transitioning from the construction phase to becoming an operator. Organizing all processes and getting everything working smoothly. There's still room for improvement, but we're on the right track.

Ensuring quality doesn't come easily; it's the result of continuous work. Of course, quality was designed into the data center, but it must be maintained daily. This means testing, maintenance, monitoring, and various preventative measures.

Proving ourselves was another challenge. When we were building this facility, many doubted we would get any clients and questioned the sustainability of the business. Now, as new clients, including very well-known ones, move in, the market's perception of us has visibly changed. We are taken seriously.

This is understandable – when someone does something new, the easiest response is doubt. All we could do was prove the doubters wrong.

This is confirmed by our clients' feedback. We're pleased to note that we have exceeded expectations and our clients are very satisfied.

What are the goals for this year?

Since the Estonian market is small, we will start looking more abroad. Our data center is so large that it exceeds the current, if not future, needs of Estonia. If we now complete the remaining two-thirds, we are ready to accommodate clients from outside Estonia.

We've also just launched our partner programme, inviting all IT companies that offer services to end-users to join. We aim to make hosting IT equipment a part of more companies' service portfolios, simplify finding partners, and allow more businesses to benefit from the most modern data center environment in the Baltics.

And building – that's the keyword for this year. We're in a construction phase again, but on a smaller scale.

Is the Estonian market becoming too small for you?

To some extent, yes. For our company's development, expansion is the only viable option.

We have space to build two more facilities of the same size on the same plot. Whether there's a need for that will show in time. If a client needs 2-3 megawatts of power for developing artificial intelligence, maybe it's worth building here. For now, we don't see that need; we're looking elsewhere.

Our vision includes expansion in Eastern and Central Europe. Does that mean you're looking for foreign clients or actually planning to build there?

We're primarily seeking clients for this facility, but our vision to expand into other countries remains. This may not mean building new data centers, but acquiring, merging, or adapting existing centers to our standards, depending on opportunities.

Pursuing this remains our plan and aligns with the vision of our investors, the Three Seas Initiative Investment Fund.

What would you wish for the new operating year?

Security, reliability, and efficiency! May our facility always be operational and connected to the world. Available and connected – as our mission states. This is the most important thing in our business, creating the most value for our clients.