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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."
In the finest of Slashdot traditions I'm speaking from barely informed ignorance here:
It seems to me you can control your costs by buying existing space, like a mothballed factory, in an economically depressed area. Like, say, anywhere in the rust belt. You've got a bit of flexibility in siting as long as you can get Internet pipes, and you don't necessarily *have* to set up in an area known for a workforce with a high degree of tech skill (and absurd prevailing wages along with almost certainly having higher cost of everything because its metropolitan).
Our technology incubator in Japan is in a park with a few major data centers and is located 40 miles from the middle of nowhere. The US analog would be siting the datacenter in a cornfield in central Illinois. We have (comparitively) cheap power rates, a cost of living (and prevailing salaries) a fraction of that in Nagoya, and the rent (heavily subsidized by local government, which may not be an option for folks discussed in these articles) is a song.
Help poke pirates in the eyepatch, arr.
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? The costs that go into making a real datacenter are significant, and building the place from scratch for that purpose can be cheaper. Building a datacenter right downtown is a stupid idea, but that doesn't make building it out in the boonies a good one.
"I use a Mac because I'm just better than you are."
Like I said: I live in Japan. We're the earthquake capital of the world, and yet somehow we manage to have buildings stay standing. Many of them also contain computers or millions of dollars of capital, strange as this may be. I trust that the folks living in Iowa and Detroit have figured out some combination of construction techniques, building codes, and insurance schemes which enables their cities to be something other than windswept wastelands. I mean, how long has the auto industry put billion-dollar factories in Detroit? And how many times have you seen GM say "Aww shootskie, we forgot about the ice storms and now three production lines are buried under 400 tons of collapsed roof and snow?"
Help poke pirates in the eyepatch, arr.
Power grid reliability is not a big concern. Data centres of this size will have backup generators. Taxes aren't going to be an issue either. These data centres will be given sweatheart tax deals, no interest loans, and other incentives. The states and counties will give out these incentives because the data centres will bring so called "high tech jobs."
I love this cycle, where internet business heats up and companies start building datacenters to keep up with perceived demand. It happened the last time around, with companies like Exodus, Cable & Wireless, and all the others who were overbuilt when demand didn't materialize.
Anything over 50k sf of datacenter is more than enough, assuming you've got cheap and available power, and close to a couple fiber loops. The big reason that these new datacenters are so large (200k-400k sf, compared that to 1 floor of a high rise office at 30k sf) is because they aren't allowed to have the power density (elec co can only supply so much at reasonable price). With servers more power hungry, yet smaller, there's a need for more power/cooling, but less space.
Building new isn't all that different in cost of retrofitting an old warehouse. I'd just buy one of the small operators out there and be up and running for a % of the cost. The problem there is that there's a company called Digital Realty Trust buying all a lot of the datacenters in the market, and they've got a ton of cash.
So maybe the rust belt should be fighting for these developments, but they can't overcome 1 issue - companies want to be close to their datacenter. It goes against the security mission, the cost justification, and just about everything else; but these always get built right next to corporate HQ or in some metropolitan area. Doh!
Why cut IT when your office space costs $3/sf? gibso
The otherr realy key metric is server utilization. It turns out the IT's dirty little secret is that the way they deploy applications (in static silos of servers that can't be shared between applications) requires that each app be dramatically over provisioned with hardware to handle various load changes. A typical data center is only using 10% of it's compute capacity at any given time. This has gotten dramatically worse as people moved from Mainframe->SMP->Cheap Pizza Boxes.
-Steve
http://www.cassatt.com/