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Estonia’s biggest data center was born through a 100 million euro Finnish investment, hard work and some luck

A small favor led to a big dream coming true for Kert Evert, now a co-founder of the largest upcoming Baltic data center in Estonia.

A small office room in Estonia’s capital Tallinn was stacked with servers. These were heat-emitting, humming machines that belonged to a major telecommunications company. If something had happened to those servers – a neighbour had started a fire, the room had become too humid or dusty – the whole company would have collapsed like a house of cards.

Data is everything these days. Every youtube video, profile picture, email and website is stored somewhere, in a real physical place. Even if it all seems seamless and wireless to us when we browse. Data is the new gold. And just like gold, it needs a secure vault.

That’s why Kert Evert was given a task as the company’s infrastructure manager to find the machines a bigger, safer place to be.

 Kert Evert observing the construction of data center in April 2020.

He then realised that Estonia, one of the most tech-savvy countries in the world, as referred to by the New York Times, doesn’t have any large-scale specialised data centers. Evert started dreaming of creating one.

It was by accident that he met a vice-president of a Finnish pharmaceutical company Leif Hildén, who wanted to buy a summer house in Estonia and grow vegetables in a greenhouse. The Finn asked Evert to translate for him. “I didn’t know him, but of course I was willing to help,” Evert said.

The act of kindness paid off. As they got to know each other better, Evert trusted Hildén with his crazy-sounding idea. He said he would like to build a data center where the servers´ heat would warm up a greenhouse next to it. “We would both win!” he claimed. Hildén could grow vegetables and Evert could start something of his own that Estonia needs.

The Finn didn’t know anything about data centers, but stopped by his neighbour, a well-connected and experienced investor Tero Viherto. Viherto agreed to hear Evert out.

The Estonian then started drawing up his first plans. He sketched a data center that was connected to a greenhouse with heat transmitting pipes.

Evert then got on a ferry to Helsinki to present his ideas to Hildén and Viherto. They remained sceptical. If big data centers are the future, why aren’t there any in the Baltics already, they wondered.

Meanwhile, back in Estonia, Evert started creating a small data center for his telecommunications company where he then still worked. He planned every detail. Evert had spent years taking care of data and keeping machines safe, he knew what mattered.

MCF Data Center once it will be completely ready.

We rely on the invisible data

He took Viherto and Hildén for a visit to the first data hub he created for his telecommunications company in 2016. The Finns were impressed. Evert had thought of everything.

He had even installed systems to muffle the sound, because loud noise can cause data loss. According to Bloomberg, that’s what happened in a Swedish data center in 2018 when a fire suppression system emitted loud sound and destroyed the hard drives. Nasdaq Nordic couldn’t start trading operations and many markets were affected.

People depend on those humming servers in almost every aspect of their lives, especially in a digitalised country like Estonia where everything – except for getting married, getting divorced or buying real estate – can be done online. 99 percent of the services are delivered electronically. Vice News once even called Estonia “a country in the cloud” and the country of the future.

A data center seemed like the most natural next step for e-Estonia.

Location is crucial

The Finns were now on board, so the work could finally begin. But before that, another unexpected turn happened. Every year Tero Viherto goes to Lapland together with a group of friends. One of them, Osmo Koskisto, is a leading data center expert in Finland, who had been involved with finding locations for almost all the data centers in Finland. Viherto found out about it once getting involved with MCF data center and invited Koskisto to become one of the first investors of Estonia’s first ever large scale data centers.

“I wanted to invite people with skills, not just money,” Viherto, a private investor and entrepreneur explained.

MCF Group Estonia was founded on Evert’s birthday in the summer 2016. 28 shareholders – 22 Finns and 6 Estonians – joined in. Evert became the CEO, Viherto the chairman of the board. Even Hildén, who only wanted a summer house in Estonia, became one of the investors and found himself involved with something much bigger. The shareholders included experts from many fields: for instance, a lawyer, an expert in managing big building projects, a heat transfer specialist.

Viherto was surprised by the enthusiasm he faced: “Only two investors we approached said no,” he said. Estonian Investment Agency, the national organisation that supports foreign direct investment in Estonia, jumped in to help.

“It’s extremely easy for a foreign investor to enter Estonia’s market,” said Pilvi Hämaläinen, the Investment Agency’s Director of Business Development in Finland. “Everything goes very fast, it’s all online.”

Even during the current coronavirus-related crisis Estonia moves on in full swing. As a small country, Estonia can react quickly to a changing situation. Just think about the world-wide movement The Global Hack that kicked off in Estonia. Besides, as a digitalised society, Estonian residents have strong IT skills and can generally continue their work from home offices.

The government offers strong support for foreign investors. “We help develop the business, negotiate with public and private sector partners and overcome any obstacles there may be,” head of Estonian Investment Agency Raido Lember said.

Estonian government was interested in supporting the MCF group that brought with them one of the most important foreign investments in the IT field in recent years. The data center will hopefully attract more investors too, Lember said. Knowing they would have a safe place to keep their data in Estonia makes it a more attractive country for foreign companies with IT-sensitive activities.

Kaimar Karu, former Minister of Foreign Trade and Information Technology, and Kert Evert, celebrating the start of the construction of MCF Data Center.

What also made Estonia a good target for a data center is its attractive and company-friendly taxation system. The economy is stable and Estonia has a good reputation in the region. Or as Viherto put it, Estonia is a gateway between the east and the west. He is hoping that the future clients will come from all over Eastern Europe.

Meanwhile, as the investors were coming together, Evert was in search of future customers. He made pre-agreements with the “anchor clients” and started designing the data center together with them. Having a list of key future customers, in return, helped Viherto to get investors on board.

The data hub will be spacious. Altogether MCF Data Center is designed for 3,300 data cabinets with 135,000 servers and 42000 square meters of floor space. That’s comparable to an average European data center.

It took the company two years to find the perfect plot of land. Finally, they chose a location near Tallinn, in Saue. It’s close enough to the potential customers, but also excluded enough to be safe.

The land they chose lies near the power lines of Elering, Estonia’s national Transmission System Operator for electricity and natural gas. The center will be directly connected to Elering’s network. The power needs of the center will be comparable to a whole suburb of Tallinn.

Saue’s mayor Andres Laisk happily welcomed the data center with both hands. Not because it would bring many jobs, but because he “always liked people with big visions”, as he noted.

A comfortable place for IT staff

Evert knows how uncomfortable it can be for a technician or an IT guy to visit a data center and configure their servers in person. Sometimes it can mean sitting next to a cupboard in a cold room for hours.

His data center will have office spaces that the clients can use. They will have kitchen and resting areas, catering service, they can even buy installation materials from a self-service shop.

But most importantly, the center is modifiable according to the client’s needs. With movable walls, the spaces can be made bigger or smaller. Smaller companies can rent a space in a rack and share it with others. Bigger companies can have the whole room. In this way, as the company grows, the server space can grow with them.

For now, the greenhouse idea has been pushed to the background, but they do plan to use the emitted heat to warm up residential houses nearby. The focus on sustainable and green solutions has not changed.

“We are not just providing Estonia with infrastructure they need for their e-country ambitions,” Viherto explained. “We will make Estonia green again!”

Therefore, the MCF team will use green energy, less energy and use the waste heat to warm up the houses nearby. When it’s completely ready, the center will cost up to 100 million euros. “It’s a pricey project,” Viherto admitted.

Many have tried to build a real data center in Estonia, but without luck so far. Viherto summed up MCF’s recipe for their success: “Sometimes it’s pure coincidence, sometimes it’s hard work. In this case, it’s both.”

The first part of the largest Baltic data center will open its doors at the beginning of 2021, three months earlier than planned. The construction was sped up because of the coronavirus situation that clearly illustrated how crucial secure and smooth e-services are.

 

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