'Cyberattacks Will Spill Over': As Russia Brings War To Europe, U.S. Data Centers Brace For Impacts
From soaring oil prices to corporate divestment from Russian industries, the conflict in Ukraine and subsequent sanctions against Russia have sent shock waves through the global economy.
Data centers have not been immune to these impacts — and in some respects, they may be particularly vulnerable.
Supply chain disruptions for everything from building materials to network equipment are already threatening to create delays and increase costs for data center operators, and the conflict may exacerbate the problem by cutting off a key source of commodities needed to manufacture microprocessors and hindering supply routes.
There is also a growing concern over state-sponsored cyberattacks, both on the applications housed in data centers and on the physical infrastructure these facilities rely on. The deteriorating relationship between Russia and the major Western economic powers is already hindering the rollout of space-based internet and digital infrastructure and creating an environment of uncertainty around the interconnected nature of the world’s digital future.
“As usual, these geopolitical issues do have an impact of introducing uncertainties, affecting sentiment,” said Baron Fung, research director for Data Center Capex at the Dell’Oro Group. “When enterprises see uncertainties, demand may get pushed out until the situation settles.”
Supply Chain Issues Could Get Even Worse
The supply chain crunch is perhaps the most pressing issue across the data center industry, and the conflict in Ukraine is poised to make it worse.
Of particular concern for data centers and the IT world as a whole: Ukraine and Russia are among the leading producers of neon and palladium, materials needed to manufacture semiconductors, of which there is already a global shortage.
Around 37% of the world’s palladium, a metal used in sensors and certain kinds of computer memory, comes from Russian mines. Around half of the world’s processor grade neon — used in lasers that engrave processor chips — was produced collaboratively across the Russia and Ukraine border, with raw neon extracted at Russian steel mills and then refined in Ukraine.
Large data center providers have remained relatively insulated from the chip shortage due to their purchasing power, as suppliers prioritize their largest customers. And while it’s unclear whether chip makers will be able to find new sources of these materials in time to avoid delays or significant cost increases, any potential slowdown in chip manufacturing could create problems, particularly for smaller data center operators or equipment manufacturers.
“The time gap between stockpiles running out and new factories coming online is where the risk for chipmakers lies,” Brady Wang, associate director of semiconductors at Counterpoint Research, told The Wall Street Journal.
But the supply chain impacts for data centers go beyond just microprocessors. Experts say that in an industry experiencing such high demand for new facilities that places such a high premium on speed to market, the logistical disruptions created by airspace and port closures could cause problems.
“Potentially, logistics and transportation could be impacted,” the Dell’Oro Group’s Fung told Bisnow.
“If Russia counters by shutting down their airspace, that will be big trouble as flight paths between Asia and North America cross over Russian territory. It’s perceivable that vendors may try to de-risk their strategy by increasing component stock levels. “
Further Insecurity Over Cyber And Physical Security
Swiss police formed a security perimeter around a data center housing the SWIFT financial services network last week, providing additional protection for the facility in the hours after major Russian banks were removed from the system. It is unclear if the facility faced a specific threat, or if there was also additional security at SWIFT’s other two data centers in Northern Virginia and the Netherlands.
While this kind of increased concern over physical data center security remains an outlier, the precautions at SWIFT’s data center reflect an increased vigilance, if not a heightened security posture, across the digital infrastructure and data center space. Experts say there is an expectation of cyberattacks from the Russian government or affiliated groups.
"I fully expect there will be more cyberattacks against Ukraine, and that it will spill over," said Rahul Telang, professor of information systems at Carnegie Mellon University's Heinz College, speaking to Data Center Knowledge. "If the U.S. takes steps against Russian financial interests, you cannot deny that something like that can happen."
Russia has a track record of using cyberattacks as a foreign policy tool in times of conflict. Indeed, the Russian government and affiliated criminal syndicates launched attacks on Ukraine before the invasion began, according to reports.
The U.S. government’s Cybersecurity and Infrastructure Security Agency recently launched a “Shield’s Up” website in response to the conflict, advising companies with IT infrastructure on-premises, at a colocation data center or in the cloud to be prepared for the inevitable.
“Every organization — large and small — must be prepared to respond to disruptive cyber activity,” the site says.
While cyberattacks jeopardize the applications housed on equipment in data centers, industry insiders tell Bisnow the greatest risk to data centers themselves comes from attacks on systems that control the power grid or other infrastructure these facilities rely on.
These disruptions have already started. In the first days of the conflict, an attack on a satellite network took more than 5,000 wind turbines across Europe offline.
Delayed Infrastructure Development ... In Outer Space
Space-based internet and digital infrastructure may be a significant force that shapes the data center landscape in the future, but the deteriorating relationship between Russia and the West is already creating delays in making this technology a reality.
Space-based connectivity provider OneWeb was scheduled to launch 36 satellites this week aboard a Soyuz rocket operated by Russian space agency Roscosmos. The UK government owns a significant stake in OneWeb, which plans to launch a commercially oriented space-based internet service for companies like AT&T and BT.
But earlier this week, Roscosmos demanded that the UK government divest its stake in OneWeb in order for the launch to go forward, citing “the UK’s hostile stance towards Russia.”
According to Space News, OneWeb’s board subsequently voted to suspend all launches from the facility and ordered all staff to vacate the Roscosmos launch facility in Kazakhstan.
OneWeb was due to begin commercial service, but that now appears to be in jeopardy. The company had planned on launching an additional 200 satellites from Russian rockets over the coming year and relies on Russian-made thrusters on its satellites that are now unlikely to be delivered.