INTERVIEW with Tõnu Grünberg, head of the largest data center in the Baltics: how to find customers in difficult times?

A year ago, the largest data center in the Baltics opened its doors outside Tallinn. To describe Greenergy Data Centers (GDC) in one word, it could be ‘future-proof’. Never has there been a large-scale, purpose-built data center in this country: the cooling systems of GDC are controlled by artificial intelligence, the complex has the highest certifications, and is protected using state-of-the-art technology and by armed guards.

Against this backdrop, the opening of the data center coincided with Russia’s war in Ukraine, the pan-European energy crisis, and the chip shortage. Tõnu Grünberg, CEO, talks about how GDC has coped with the challenges and what the new year will bring.

Tõnu Grünberg, the CEO of Greenergy Data Centers . Photo by Andres Oolberg.

You have been on the market for a year now, what’s the feedback, is such a data center needed in Estonia?

As things stand today, it is safe to say that it is. Of course, when the plans to build the largest data center in the Baltics were still in the designing stage, there were questions about whether there would be enough interest to fit out such a large area [the building has a total floor area of 14,500 square metres, or about two football pitches’ worth of floor space]. Fortunately, the first year has shown that there is no shortage of interest, and new clients are constantly coming in. It will of course take some time to fill the data center, but we can see that the sales pipeline has been filling at a good pace since the second half of last year.

In fact, we have been very positively received and awareness of us has grown considerably.

Surely you had estimates of how quickly the building would fill up.

Of course, we made forecasts, some of which were right and some of which were wrong. Broadly speaking, we are on track. Modularity is our strength. This means that while the customers are inside, we have only finished building part of the server rooms in the data center, and part is still being finalised. So, we have the space and capacity to grow and precisely meet market expectations.

Which companies are interested in you?

We have a very wide range of customers. Including large ones, such as SEB bank, or emerging businesses, such as Storadera, which provides cloud space. Understandably, we cannot reveal the names of many of them publicly due to confidentiality obligations. They come from a wide range of sectors, including IT, energy, and telecoms, in addition to finance. Of course, there are also businesses offering a range of services.

I’ve noticed that several organisations have come to us with the idea of setting up a ‘backup data center’ at the GDC to ensure that work can continue in the event of the unexpected. However, as we have got to know each other better and understand our value proposition, this plan has changed. In the end, we will still be used as the main data center.

All in all, the cross-section of customers is quite diverse. It is important to add that we also do background checks on all our clients, and not just anybody can stay with us.

How has your business been affected by the war in Ukraine?

The war in Ukraine started shortly after the opening of our data center. Initially, this had a negative impact on the interest of some clients with an international reach, but today those fears have largely dissipated. However, I can see that, while at the end of the last decade, environment issues became increasingly topical, then now, issues of security and reliability carry considerably more weight. If we now ask customers about what is most important to them, the environmental footprint is no longer their main concern, as it was before the war.

What have you had to restructure in your business as a result?

Nothing, really, because reliability and security have been at the forefront of our plans from the start. As proof of this, in the first year of operation we achieved 100% reliability, meaning that we operated without interruption or any down-time. Those who have visited us can confirm that our security measures are like those of a defence organisation. So, these concerns are covered.

Nonetheless, environmental stewardship and efficiency are not off the agenda. We are moving steadily closer to our goal of operating around 25 per cent more energy-efficiently than the industry average, as the load on one data center increases. This means that we can keep the equipment we host running with a quarter less electricity than the average data center.

One of the key words last year was ‘energy crisis’. What did it mean for you?

This clearly had an impact on every organisation that consumes more electricity, and made us look for more flexible solutions. After all, electricity is a key resource for us and our customers. So, we now offer both non-fixed price packages, which of course became very unpopular at one point when prices sky-rocketed, and fixed price electricity packages. Now electricity prices are on a downward trend and interest in the stock exchange package is growing again. I believe that electricity will remain an important issue for a long time.

Can a new upturn be predicted for environmental issues too?

International customers continue to take a keen interest in environmental issues, and Estonian companies are also becoming increasingly aware of energy efficiency. It is just that – as mentioned earlier – in today’s complex world, security and reliability are at the top of the agenda. I believe that when the war is over and energy prices come down, people will get out of the ‘survival mode' and can start thinking about the future and making long term plans. We will continue thinking green, even if it may not be the priority for our customers today. One day, it will become important again.

At the end of last year, we heard that the audit of the data center, which lasted for three years, was completed, what was the outcome?

Firstly, we have the ‘traditional’ ISO standards, such as ISO 9001 for quality management and ISO/IEC 27001 for cyber security. But what is unique, and what we have worked hard on is EN 50600, a special European Union certificate for data centers, which no one else in the Baltics or Finland has.

It is a comprehensive standard that looks at the data center as a whole, including security, reliability, and environmental performance. In short, it is a complete check-up – if something is wrong, there will be precepts and a review. We were audited by the German company TÜV Informationstechnik, one of Europe’s leading auditors of data centers. German precision is well known – they did not miss a thing. Even the label, which was stuck on the wrong way round, attracted attention. In fact, the process was very useful because we could prove ourselves.

Is anyone really interested in certificates?

Absolutely. After all, anyone can declare themselves up to any standard. However, if you can say that you have certificates proving that you meet the requirements of certain standards, that is a whole different ball game. The latest certificate that we were awarded, EN 50600, proves that our promise of quality is justified and we have been audited by an independent party.

What plans do you have for the coming year?

We will continue in two directions. Firstly, by building server rooms to meet the needs of our customers, and secondly, by expanding our range of partners and diversifying the services we offer.

In a sense, a data center can be seen from two perspectives. On the one hand, it is an ideal environment for hosting IT equipment, but on the other hand, it offers a wealth of opportunities for synergies and added value. For example, bringing in different telecommunication operators and offering customers more choice, or enabling them to procure hardware or software through partners, or connecting customers directly without using the public internet, and so on. A highly versatile IT services ecosystem is already being developing in the GDC. The more time passes, the more opportunities arise.