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The Soaring Costs for New Data Center Projects
miller60 writes "The cost of building a quality data center is rising fast. Equinix will spend $165 million to convert a Chicago warehouse into a data center, while Microsoft is said to be shopping Texas sites for a massive server farm that could cost as much as $600 million. Just three years ago, data centers were dirt cheap due to a glut of facilities built by failed dot-coms and telcos like Exodus, AboveNet and WorldCom. Those sites have been bought up amid surging demand for data storage, so companies needing data center space must either build from scratch or convert existing industrial sites. Microsoft and Yahoo are each building centers in central Washington, where cheap hydro electric power from nearby dams helps them save on energy costs, which can be enormous for high-density server installations."
Some of these firms should really start looking at warehouses in Detroit. If you can secure the facility properly, you can get TONS of old warehouses and factory floors for very little. Look at the conversion that Wayne State did with techtown - they converted an old abandoned warehouse into usable high-tech space (and the real estate was virtually free).
- tom -
I work for a large financial institution.
We have a LOT of data...and not just account data.
Back in the 80's, the standard was two mainframes in the same room, back-up
tapes kept on and off site, and a contract with a company to supply a DR computer
if it was ever needed.
Cut to 2006...
We have dual fully redundant data centers, each with many mainframes, and pipes
big enough to drive a dump truck full of bits between the two.
A third one is about to open and a fourth is under construction.
Most of this is for SOX.
$7.95/mo, 200 GB disk, 2TBxfer, MySQL, PHP, RoR.
Believe it or not, the speed of light is too slow. Latency would be an issue if the data center was in Alaska.
Actually your not that far off the mark. Building a data center basically comes down to five key components:
1. Getting lots of cheap power. Being next to a power plant with tons of extra capacity doesn't hurt. The farther you are, the more loss, and that means more $$$ per MW.
2. Internet pipes. Having X thousand servers up and running with nowhere to push the bits is pretty useless. I'm not sure if most people understand how hard it is to say get 40-60 Gig of bandwidth to the middle of nowhere. It takes months, if not years, to put in the right infrastructure. If you think I'm lying, call up say, Sprint and ask them for a 10GE pipe to the middle of Iowa but be careful, thier laughter might hurt your ears.
3. Cheap labor. Gotta have bodies to run everything from cooling to electric to security. You could do it with Robots, but after a while, as with all robots, they want to kill.
4. Favorable tax status. When you install hundreds of millions of dollars of hardware in one place, the amount of taxes you pay on it becomes non trivial. Many companies work out sweet tax deals with the local governments for just this reason. Basically the conversation goes, "You give us cheap tax treatment, we give you 500 jobs."
5. And of course, cheap land. Pretty self explanitory.
Because of small number of sites that are favorable in all these ways, I'm not surprised that costs have increased. But like all things this will change. Places with the last 3 bullets will build out power and connectivity and the datacenters will pop up all over the midwest. Either there or we'll outsource them to India.
ez
1. Access to a large body of water cuts costs immensely when dumping the heat from the beast. Fresh is preferred but not required.
2. Access to high voltage lines, or a short distance to one that can be tied into. 34.5 and 105kV lines are expensive to build and maintain on a long-term basis.
3. Access to fuel. Ideally rail, ship, or pipeline, because power plants burn massive quantities of fuel. Trucks do not cut it unless the distance is extremely short.
I recently worked at a power station that was originally built with none of these things. The only people to ever make any money from this white elefant were the contracters that built it.
Build your datacenter near a large body of water (or maybe in Juneau?). Build it near a power station (or build your own steam plant?). Build near some big strands of fiber. Being in the middle of nowhere for the sake of being in the middle of nowhere only profits the contractors.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
It's incredibly uninformed to talk of costs in terms of total dollars!
The old metric was in $/sq. ft., and today it is better to talk in terms of $/kW given higher densities.
For a wide range of data centers, the building shell cost is around $100-250/sq. ft. An enterprise (EIA 692 "Tier 4") data center costs about $22k/kW, plus the high end of the building shell cost. A "Tier 3" data center is closer to $20k/kW and $200/sq. ft. When you drop to Tier 2, you cut the cost in about half, at $12k/kW.
The only costs that have risen dramatically recently are generators and copper, which have a one-year lead time for big engines typically used (1.5-2+ MW) for the generetor, and about triple the cost three years ago for copper-- maybe a 15% premium maximum for a large data center.
Costs get much more complicated when you talk about provisions for future expansion and site constraints.
As for energy costs, yes, cheaper electricity is good for a data center. A 2MW data center will save about $350k/year if they can drop their electricity cost by $0.01 per kWh!
The cost of turning that into a safe datacenter environment would be enormous. When was the last time you heard of a abandoned factory being built to hold a temperature controlled environment?
oh for crying out loud. It amazes me the lack of thought outside the box people have.
Options...
1 - spend very little and build seperate enclosures inside the wearhouse that hold the libert units for environment control and the servers in data-center pods.
2 - go uber cheap. Buy a bunch of camper trailers that are gutted and put the servers inside those parked in the wearhouse. works great and I have seen several startups that did exactly that. this also works very well for rental property as you can pull up stakes and move your datacenter within minutes of getting your data pipes into another cheap wearhouse.
the best option and the one usually does in these types of datacenters is the first. you can hire simple general contractors to build interior walls with roofs that are only 10 feet high and insulate the crap out of them to make the perfect datacenter within 5 - 30 days.
It's the mentially retarted CEO's and Venture Capilolists that think you need to spend 80 million dollars on a flashy facility with lots of glass and artwork and special "touches" that only impress clients that will never go there or see it.
Do not look at laser with remaining good eye.