Iceland: The Swiss Bank of Data

I just spent four days with Sol Squire, his charming partner “Alla,” and many folks from Skyrr — a 50 year old IT outsourcing company in Reykjavik, Iceland. Skyrr is partnering with the Icelandic government and with telco infrastructure providers to create a unique service aimed primarily at US and European multinationals and financial institutions called Data Islandia. I have briefly mentioned it here a couple of times, so I had to go to Iceland to learn about it for myself.

Sol is a great guy, and he has partnered with US and European talent to devise a pretty interesting value proposition for companies confronting regulatory compliance-related data retention and management requirements. Data Islandia will provide some up-front consulting and assessment services to help identify the regulation-imposed data replication, retention, and management requirements the company faces. Then, it will offer to host the archival retention data pool in Iceland at Skyrr facilities, which are more than adequate in terms of infrastructure and personnel to do the job.

The more I learned about the service, the more it made sense. I was astounded a few weeks ago in the Netherlands, when I was speaking at the Banking and Finance Seminar sponsored by ISIT, by the lack of preparation among leading financials for the coming onslaught of new European “Directives” (their regulatory regime) that go into effect this year and next. Have they identified the relevant data required for management under the directives, such as MiFID? No. Have they provisioned infrastructure and personnel to manage and maintain the data archives that will be required under the new rules? No. Have they begun tallying the costs for compliance? No.

Bottom line: what US companies have endured over the past few years in terms of SOX, GLBA, HIPAA, SEC, and state law compliance program development, which have chalked up costs in excess of $70B according to one watcher, the Europeans have not yet begun to contemplate in an alarming number of cases. If Data Islandia can become the trusted repository for the toxic data waste of the multinationals, somebody is going to get rich. Couldn’t happen to a nicer bunch of folks than the Data Islandia/Skyrr operatives.

The value proposition is extraordinarily simple: Iceland has the power, heating and light (most of it geothermal from lava flows at one end of the island country), the cultural norms, and the skilled personnel to host the world’s archival data in a safe and secure way. Despite some recent telco glitches, which have now been completely resolved I was assured by telco and government operatives, you can get the equivalent of an interexchange carrier hook-up between your facility and Data Islandia’s. So, from a networking, storage and IT perspective, this is good stuff.

Human factor security issues and the like are virtually non-existent: Iceland has 300,000 folks, 70,000 of whom work, and everybody knows everybody. Foreigners are watched like hawks — but with a casual flair that never makes you feel like Big Brother is looking over your shoulder. I was told that my entry into the country — immigration controls at Kefalik are about as unobtrusive as you would find when de-planing in Cleveland — were actually very efficient. My picture had been taken 8 times and everyone knew what hotel I was going to, who I was meeting with, and for all I know what food and drink I consumed while in country.

The people are very friendly, but also a bit retiscent in their dealings with foreigners, if that is the proper word. I chalk some of this up to the Viking roots of the community, which encourages self direction and a disdain for dependency on others. The Icelanders tend to be highly motivated, creative, and perhaps a bit obstinate in an Iowa sort of way.

All of these things bode well for the fundamental solvency of the Data Islandia offering, which has already accrued large legal firms among its first clients.

I met with operatives of the Prime Minister’s and Financial Minister’s office right off the bat. Topics were national archival preservation and e-government security. I was amazed at how integrated all governmental information is and by the controlled availability provided to all citizens to government data. Also interesting was the integration of all financial systems that made currency something for tourists to collect, rather than the actual vehicle for buying and selling goods and services.

Behind most of the integration is Skyrr, which is helmed by a genuinely charming fellow, and former Reykjavik mayor, CEO Thorolfur Arnason. His strong right arm from a technology perspective is Thorvaldur Sigurdsson, Managing Director of Techical Operations Solutions. “Valdie” and I spent quite a bit of time together and he is one of the most intelligent out-of-the-box CTO/COO guys I have ever met. We shared many views in common and I had the feeling that we were both learning from each other during our chats.

Skyrr operatives who stuck out in my mind were AEgir Saevarsson, Sales Manager in the Technical Services Division, Helgi Helgason, a service manager, and Kristjan Brooks, a project manager covering ASP and Outsourcing Technical Services. There were many others I met in the Data Islandia and Skyrr offices, at a speaking event they put together while I was there, at dinner meetings, etc. I don’t want anyone to get twisted because I didn’t mention them by name — though I doubt they would. These folks stick in my mind because I have promised to make some effort to introduce them to industry folks who can help them with some of their pressing initiatives. Bottom line: Skyrr and Data Islandia are running some very good operations with very smart people who know their jobs. They get two thumbs up from me for their capabilities.

EMC showed some early interest in the development of Data Islandia. I won’t say more except to note that I have been busily encouraging HDS, Sun/STK, Microsoft and a few others to engage in this opportunity.

No, I am neither an investor, nor am I on the payroll at Data Islandia or Skyrr. I just wanted to take a look at their business plans and capabilities before I wrote anything more detailed about their service.

This idea is a good one, as nearly as I can tell. I see the notion of a skillfully managed archive service as a godsend to larger companies (and maybe even some smaller ones) who lack the coin to buy a bunch of new hardware and software, hire and train new cadres of IT personnel to manage and police it, and have the resulting infrastructure audited and documented and proceduralized to comply with the necessary requirements. The value is underscored by the fact that most of the stuff being used currently to create archives on content addressed platforms are lock-in products from the vendor community: roach motels where your data checks in but cannot be checked out. The Data Islandia approach insulates the consumer from these issues.

I’m sold.