Talk about ‘sunk costs’

Software giant Microsoft is giving new meaning to the term ‘sunk costs’… by literally sinking a new data centre off the coast of Orkney, in north-eastern Scotland.

The pilot project will see the data centre powered and connected to the wider world via an undersea cable. Microsoft’s thinking here is that, by dropping this facility into the sea, it will – wait for it – be able to save on cooling costs.

“We think we actually get much better cooling underwater than on land,” quipped Ben Cutler to the BBC, a statement that resonates with the genius of simplicity.

There are a few caveats involved, including the fact this sunk data centre is relatively tiny compared with its on-land counterparts, as well as questions around its environmental impact (“You just end up with a warmer sea and bigger fish,” warned professor Ian Bitterlin). But by far the biggest one is that, once sunk, you cannot fix the onboard computers.

Now, we don’t want to spoil the party here, but having come across Windows’ famous ‘blue-screen of death’ over the years, we’re a little bit wary about the technology risk on this one. So, a word of warning for forward-looking managers eyeing this for their core-plus-plus-plus allocations, because once you’ve sunk that money, you might find your investment is underwater in more ways than one…