Iceland looks to serve the world.
news.bbc.co.uk
news.bbc.co.uk
The island has about 130 volcanic mountains, of which 18 have erupted since the settlement of Iceland. Over the past 500 years, Iceland's volcanoes have erupted a third of the total global lava output. - http://en.wikipedia.org/wiki/Volcanism_of_Iceland
But then, Japan has lots of earthquakes and quite a bit of storms and rain and people still live there. There are also regular devastating hurricanes in the Caribbean and the south-east USA and people also still live there!
http://de.wikipedia.org/w/index.php?title=Datei:Iceland_Mid-...
The earthquakes are probably a bigger problem, since they affect a larger area don't all occur in specific locations. Design the building properly and even that shouldn't be a big problem.
5,300 had to be evacuated from the island of Heimaey due to an eruption in 1973.
Do you know the details of Icelandic law? Does your corporate lawyers? Your regulation compliance officers? How many Icelandic Intelectual Property specialists can you hire tomorrow? There is a reason that banks have HQs in London/New York - they have a few hundred years of case law that they understand.
Iceland is bankrupt, which means it is under thumb of the IMF which means it will do whatever Washington says. Do you want your data to be ruled officially by Reykjavik but unofficially by MPIA/RIAA/Whoever says.
Icelanders vote for sane middle of the road goverments. Even during the financial crisis (which hit Iceland disproportionately) they didn't go extreme. Why would it be easy to change that? Easier than with larger countries?
But I know what you mean and you are right, the EU doesn't prevent rabid populism. Interestingly though, it's the mainstream parties in the EU who aggressively pursue all kinds of privacy intrusions and surveillance madness.
A typical server uses 1 ton / year. Not many companies have more than half a million servers. Perhaps only about 2 companies.
"And, in an irony not lost on a country brought to its knees by finance, one early customer rumoured to have signed a deal to move servers here is - well who else - one of America's biggest investment banks. "
This "server farm to save the world" story smells like spin for a dish-washing debt service ---probably because Iceland hates aluminum smelting and fears the imported masses who'd work there.
The government can ensure/facilitate high speed fiber links to the continent and then let the rest take care of itself. As long as there is enough network capacity this should be a no-brainer.