Recent attention on the tech giant in September has focused on Microsoft’s failed bid for TikTok and declines in their share price in tandem with the rest of Big Tech.

However, recent results of an experiment, ‘Project Natick’, aspiring to construct an underwater data centre; show there are many reasons to be positive for Microsoft, with potentially game-changing innovations in cloud technology.

Data centres are indispensable in the increasingly digitalised global economy, a theme exacerbated by the pandemic and set to remain in its aftermath, exemplified by the monumental shift towards work from home (WFH). The data centre industry is growing exponentially, with approximately 18 million servers housed in data centres globally and worldwide spending topping £125 billion in 2019. This growth is reflected in the strong performance of data-centre REITs (Real Estate Investment Trusts) with share prices of Equinix and Data Realty,  up 59% and 38% respectively since the March market crash.

Phase 1, launched in 2015, off the coast of California confirmed the viability of an underwater data centre. Following this success, Phase 2 sought to find out whether or not a full-scale model concept was economically, logistically and environmentally feasible. 

Phase 2 launched in June 2018 off the coast of Scotland’s Orkney Islands in the European Marine Energy Centre. The data centre, named the ‘Northern Isles’ housed 864 servers, with 27.8 petabytes of disk space. In July, the vessel was retrieved for analysis and results published in the last month show great promise.

Initial results found servers were eight times more reliable than their on-land counterparts, with only eight out of 855 servers failing. On-land data centres are vulnerable to corrosion, humidity, temperature fluctuations and interference from humans. Contrary to this, due to the inability of humans to access the data centres, nitrogen can be pumped into the capsule, instead of oxygen. It is speculated that this provides a more stable environment for the data centre, keeping servers naturally cool, free from corrosion and human interference.

A huge advantage of the concept is its energy efficiency. Data centres emit enormous amounts of heat, requiring extensive cooling, which accounts for 40% of their energy consumption. Current estimates suggest nearly 2% of the global carbon footprint comes from data centres. Hence, there is an urgent need to address the energy efficiency of this technology, but underwater data centres offer an innovative solution to this. Underwater data centres use natural seawater as a coolant, instead of artificially pumped air being used. Due to the preeminence of this technology in our day-to-day lives, data centres are not going to be phased out, but Project Natick provides an energy efficient alternative to existing models, which could prove crucial in reducing our carbon footprint.

In addition to this, the Orkney Islands were chosen as the site of the trial due to the grid being fully supported by wind and solar energy. Due to being smaller in scale than on-land data centres, taking less than 90 days to be constructed and deployed; even unreliable wind energy sources were able to fully sustain the needs of Project Natick. Existing land-based data centres, require extensive amounts of energy to operate, which only fossil fuels can provide consistently. Hence, the data centres envisioned by Project Natick are conducive with the global transition towards renewable energy. Further development of this technology will accelerate in tandem with rapidly evolving marine renewable energy.

The extensive benefits of this venture in the digitalised 21st Century world are evident in a multitude of ways.

Firstly, due to the growing global dependence on cloud technology, data centres are integral to the functioning fo the global economy. Hence, outages to on-land sites caused by increasingly frequent extreme weather events or potential terrorist incidents could lead to blackouts and catastrophic disruption to the global economy. Project Natick provides much-needed diversification to support existing on-land sites

Secondly, a major issue affecting many remote coastal communities is the lack of decent internet access, which has knock-on effects on economic activity, youth migration and quality of life. Therefore, the potential for smaller data centres on the coast, as opposed to hundreds of miles away from settlements represents an extraordinary opportunity for these communities. As well as this, the ability to bring data centres closer to users broadens their array of uses, ranging from artificial intelligence, augmented reality to the Internet of Things. In the future, it is hoped customers can order personal, micro data centres tailored for specific needs, which opens up an enormous multitude of possibilities.

Further to this, Microsoft points out more than half of the world’s population live within 120 miles of the sea. Instead of paying extremely high land prices near cities like London and New York to develop on-land data centres, Microsoft’s technology utilises abundant ocean space. Global population density is on the rise, creating an urgent need to use our planet’s resources more efficiently. The ocean is a vastly under-utilised resource and far cheaper to develop, which Microsoft seeks to take advantage of through Project Natick.

This project is one of Microsoft CEO Satya Nadella’s, ‘Moonshots’, which hold the potential to transform Microsoft’s business. The importance of this research to Microsoft’s Azure business, its cloud service, cannot be overstated. It is one of the fastest growing divisions within Microsoft, with revenue expanding 91% between 2018 and 2019. Azure represents one of the biggest challengers to AWS, Amazon’s cloud behemoth, with 20% market share of the cloud servicing market compared to Amazon’s 31%. The ability to provide cheaper, energy efficient data centres closer to its customers would be a game changer in its competition with Amazon. The project will also aid Microsoft’s ambition to become carbon negative by 2030, with the potential for energy efficient data centres fuelled by renewable energy.

Data centres are becoming irreplaceable, as the world’s data is increasingly stored in the cloud. However, Project Natick has changed perceptions of what the cloud itself should look like.