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Apple Plans $1 Billion iDataCenter
1sockchuck writes "Apple is planning a major East Coast data center to boost the capacity of its online operations, and may invest more than $1 billion in building and operating the huge server farm. That's nearly twice what Google and Microsoft typically invest in their massive cloud computing centers. The scope of the project raises interesting questions about Apple's plans, and has politicians in North Carolina jumping through hoops to pass incentives to win the project. The proposed NC incentives build on a package for Google that later proved controversial."
Tax Rebates, Free / Discounted Land, and a host of other incentives?
The troll with karma.
From TFA:
Why should a company receive more tax breaks because they've gotten big enough to be able to drop $1 billion on a data center? If they can afford $1 billion, they can afford whatever taxes apply. How about you cut the taxes for small companies who struggle because of monopolies like Apple? Stop helping the companies who obviously don't need the help, and start helping the businesses who are risking having their doors closed forever because of a shitty economy.
Frankly, I'm sick of seeing the rich get the gold platter treatment.
"The $1B price tag is nearly twice what Microsoft and Google typically invest..."
Is that because Apple is using its own hardware? Google and MS should be able to get a hell of a lot cheaper hardware using commodity mobos than Apple using its own expensive machines. Of course, Apple's margins are 50%, so one wonders if they're charging themselves retail or wholesale.
may invest more than $1 billion in building and operating the huge server farm. That's nearly twice what Google and Microsoft typically invest in their massive cloud
Of course, this is Apple, all Apple hardware is going to me more expensive then typical PC hardware. On the plus side all machines can be running OS X.
Taxation is legalized theft, no more, no less.
Costs twice as much, but will be half as big (assuming they eat their own dogfood and go all xserv).
It cracks me up to keep seeing states jumping through hoops and giving away all sorts of tax revenues for these big companies to set up shop. Then, later on, the company reveals that only about 30 jobs are going to be created in actuality, and the state has lost more than if they had just let the deal pass them by.
I have yet to hear of a happy ending for one of these deals for the state, and I'd be happy to be corrected if some one has a link....
So, Apple is changing from a hardware company to a media company. Who would have guessed that after iTunes, iPods and iPhone (iPad next?) Seriously.
There are fewer illiterates than people who can't read.
Well, of course it costs $1B. They're using nothing but Xserves. If Dell was building it, it'd only cost $172M...
I think Apple will take a page out of Nintendo's book and reinvent casual, portable gaming. Imagine streamed games to your iPhone?
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
You know, that mini-touchscreen tablet that everyone thinks is coming? Instead of allowing people to use google-docs and discover that the touch interface doesn't work with regular software, Apple has been developing its own cloud computing software applications. With your $1,500 purchase of $300 of hardware, you get to use Apple's cluster-farm to write your iDocs (assuming your net connection stays up).
You missed the slash-memo - it's cool to rag on Apple now and say nice stuff about Windows 7.
It's for streaming music. They've realised that people are going to stop buying music. Spotify pwns. When Apple releases a streaming service I expect the bandwidth usage to be massive.
If you think about it, data centers in the US must be Green.
Especially if they are built by Google, MSFT, or Apple.
We should demand that 100 percent of the anticipated max power draw of all "needed" data centers come from new construction of alternate energy sources - e.g. tidal, solar, wind, geothermal,hydro - that is literally BUILT in America to provide new power.
The days of power centers being built as if it doesn't matter that they contribute to global warming and help fund terrorists are over.
Demand it.
Consumers = Power.
-- Tigger warning: This post may contain tiggers! --
Wow, with this Ill be able to use filters in photoshop sooo fast!
Maybe the datacenter is not that big. Maybe it is just a $500M datacenter but they plan to power it with Macs.
Pffft! This is so easy to figure out, they don't need a veil of secrecy. I've already figured out the datacenter setup.
I decided Apple should setup a lot of Mac Pros for their data center. Reason: Cost to Performance Ratio. Don't go telling me Apple is more expensive than Dell. You cannot compare the two since Dell does not sell AppleCare.
I went on the Apple Website, to order 999 Maxed out Mac Pro systems with RAID cards, 32 GB of RAM and max hard drives, and 3 year Apple care. Did the same thing with some Xserves (but this has support contract + something called a "Promise VTrak E-Class 16x SAS RAID Subsystem"). Whatever. My only concern is maxing out the shopping cart so that I know I am getting the best possible configuration. Note: Apple's systems are more expensive in the Europe which is why they are setting up in the US.
I also included next business day shipping (at 999 systems its $5,000 and BTW is was the same price as 2 business day shipping so I'm not splurging).
Here's my tally:
999 Mac Pro (Maxed out) Total = ~ $16,000,000
999 XServe (Maxed out)Total = ~ $86,000,000
So for $1 Billion, Apple could have
(1,000,000,000/16,000,000) * 99 = 6,187.5 Mad Pro Systems
(1,000,000,000 / 86,000,000) = 11.627907 * 99 = 1,151.16279 XServe Systems
Footnote: Use these numbers with a grain of salt as I explain below.
1) I didn't account if Apple will give themselves a discount. If they wait for back-to-school time, they might give themselves a free iPod and printer with each system purchase. Probably not the Xserves though. All the more in favor of the Mac Pro.
2) Also, I used Google to do the math. Since they likely want to compete with Apple, they might be up to what I am doing (even before it is indexed) and are intentionally fudging the numbers.
Don't be too proud of this technological terror you've constructed. The ability to boost the capacity of your online operations is insignificant next to the power of the Force.
Shop as usual. And avoid panic buying.
The data center will be built in China at a cost of approximately $250m then shipped to the US. Technical support for this data center will be in India and when the data center crashes, a "sad face" will be projected into the clouds above much like the bat-signal. The $1bn price tag is simply because it's made of funky white plastic, all staff members will be lit so only their silhouettes are showing and it will have an Apple logo on it.
Think different.
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First, I've never been a big fan of these side deals that state and local governments make to entice businesses to relocate or expand to their area. I understand why they do it, but there's a flip side that a lot of people don't realize.
Second, I actually have reverse experience with this. I live in the Northeast, which is not the cheapest place in the country to do business by a long shot. The company I work for has decided to relocate a lot of their work down South. That's great if you love the heat and don't care about moving. Tech workers are often the first to consider in any move like this -- I seriously think executives believe a stereotype that all tech workers live in a one-bedroom apartment or with Mom, have posessions that fit in half a U-Haul, don't care if they live in Boston, MA or Branson, MO and will move wherever the company tells them to. This has happened to me at 2 companies before (I'm on Offered Relocation #3 now,) and I'm not going (again.) That decision boiled down to a few things for me. First, I really like living where I live -- I don't think I could be happy where they're relocating. Second, if I did move, it'd be one-way. Sure, you can sell your house in the Northeast and buy 2.5 of them in the South, but you'll never be able to move back without huge sacrifice. Third, even if I kept my salary, there' s no guarantee I'll keep my job. Companies aren't the same way about their employees anymore -- even if you do an awesome job and have a long tenure with the company, they won't blink at the idea of letting you go. Then what? The local market salaries are 50% less than they are back home. Fortunately, I'd have savings from not spending all my money on a new house, but I know way too many people who would move down and live like kings on the salary differential.
As I said, I definitely get why municipalities jump at the chance to get a new employer in town, and why employers pursue these tax incentive deals. But just like they taught the MBAs in Economics 101, everything has externalities and nothing is free!
It costs more than Microsoft or Google because Apple is insisting on only using XServes.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
That's because I bought an iPhone and iMac recently.
I worked for a company that had received huge state and local tax incentives to build a new HQ in Kansas. The incentives had provisions that required the company to maintain a certain number of employees and very high (for the area) average salary. It took 2 years to build the building, and it was a model of "green" construction that had all the state & local politicians creaming their pants. 30 days before move-in, the company was bought out. The buying company had no choice but to let them move in - if they didn't, they would immediately owe a big chunk of money to the state. But, the new company also began downsizing the Kansas staff, and in January they announced that we no longer met the provisions of the incentives. So, they are now going to move out of that brand new building and try to lease it out at a loss until they can figure out how to get out of this mess.
The final result will be MORE downsizing of the Kansas staff than would have ever happened without all this nonsense - and the state of Kansas will lose both the tax money and an employer.
There was stupidity a plenty in this deal - the company for thinking they needed to build a Taj Mahal while sales were tanking, the state for believing they needed to cut them an incentive deal, the buying company for acquiring this pig for $2B or me for taking a job in this industry!
Did anyone else read TFA and immediately flash back to 2001-2002 and hundreds of thousands of square feet of data center space sitting empty?
http://www.crn.com/it-channel/18838014;jsessionid=QYMHD1PL3SZSYQSNDLPCKHSCJUNN2JVN
http://www.internetnews.com/xSP/article.php/898681
I bet the coal industry has a serious erection from this project. Given the amount of power even super-efficient server farms draw (let alone billion dollar ones), where does Apple expect to get its electricity to run this monstrosity? I am no expert in the area, but I can't imagine they have much in the way of hydro electric or a large renewable infrastructure (unless Apple intends to build one), so most likely they will rely on coal as their primary source which is a huge problem.
It must be nice for a hardware company to build its own datacenters. They get the hardware at cost, and since they're one of the largest purchasers of components, their cost is probably better than Google's. Which is not to say that XServe comes out being cheaper than Google's bare bone server, but you get my drift. Throw some Cisco and F5 on all this goodness, hook up HVAC and UPS and it's all ready to go.
40 % is getting off cheap for those who earn 70% of the profits and hide the rest in off shore accounts and AIG golf junkets in Dubai. If we can't tax em' we might as well feed them to the dogs.
If taxes were on revenue, and prices followed the idealistic supply/demand curve model, that would be true, because taxes would in effect be costs.
However, corporate taxes are generally on profits, i.e. on instances where the idealized model fails to hold, because the market price set by demand is significantly above the cost of production, but for one reason or another this has failed to stimulate an increase in supply to offset it, as classical theory would predict it should. In such markets, you already have a significant deviation from classical price theory, which assumes prices in a competitive market should approach the cost of production. Instead, prices are primarily being set from the demand side without much impact from the cost side. In those cases, which are the only ones in which profit taxes apply, a tax is unlikely to significantly change prices.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
do they have to put "i" in front of fucking everything? jesus christ..
I think, I'd love to work in a data-center of this caliber belonging to a company like Apple... Too bad, their job listings don't mention anything on the East Coast...
In Soviet Washington the swamp drains you.
Several posts have already pointed out instances where a company moves in, sets up, then closes their operation as soon as the free power/zero taxes run out.
Yes, this is called "running from the Bait & Switch". If the company moves to the area with a promise of some cheap resource or lower tax rate, why should they stay when that promise is broken.
Especially in economically depressed areas, where the company may be one of the only high-wage employers, what happens when a worker at the company loses their job?
From experience, either (a) get re-hired with the same company after using the severance as an extending vacation, (b) change careers to something with more promise, (c) start a company of some kind (which helps boost the region if you get money from other areas of the country), (d) move elsewhere...
I mean, what CAN'T you do?
On the local front, an employer coming to town and increasing average wages may sound good, but it's only good for the employees of that company
Right, because people earning more spend less. Oh wait.
I know a lot of people claim that the rich pay a lot of taxes, but it seems to me that reducing their companies' tax rate makes local budget problems even worse. As good as it would be, running a local government is not free. You need to pay for roads, schools, police, etc.
The cost of which you have presumably factored into the offer you are giving, including the fact that a large company can act as an anchor company to convince other smaller companies to move into the same region... government is no different than any other business, and the smart local governments act like it.
Companies aren't the same way about their employees anymore -- even if you do an awesome job and have a long tenure with the company, they won't blink at the idea of letting you go.
Which goes two ways now, companies used to be able to count on people staying for a long time and now they might be gone in a month.
Sure, you can sell your house in the Northeast and buy 2.5 of them in the South, but you'll never be able to move back without huge sacrifice.
Not even if you invested carefully using your now boosted salary to pay more? You paint this as a terrible thing but like everything else it boils down to personal responsibility, you should be saving enough to move elsewhere if you have to, or to weather a year without work.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Wrong. If you're in the market for a "$1B" datacenter, you don't have just one; your data and applications are replicated across multiple datacenters. You're also probably leasing almost all of your hardware rather than purchasing it outright. When the lease is up the racks go on the truck back to the vendor. Turn out the lights and move on to the next sweetheart deal.
Posting Anon because unlike you, I do know what I'm talking about - I've worked on just this sort of buildout and datacenter migration before and will again.
iI iThink iThis iiThing (iYes, iThat iIs iA iDouble ii) iIs iIs iSo i90's iAnd iIt iIs iGetting iVery iAnnoying.
170 Comments and still no-one has linked this datacenter to the coming MacTablet and the mobile ME. What about the tablet operates mostly on internet??
businesses pay no taxes.
What you missed completely was the point. We, the people, already pay ALL the taxes. Having a business pay its fair share of infrastructure makes no sense. Where do they get the money to pay that tax? The people. How do they get it, they charge more.
Got it?
OK, lets try it this way. What really strikes fear into law makers is that one day the ignorant out there might just understand the tax load they are under. If people had to DIRECTLY pay all the tax embedded with every purchase they make don't you think they would be pissed? Don't you hope that in such a society that they would scream for a more accountable government?
Your view is very similar to many who support "free health care". You consider it free if you can claim ignorance as to where the money that pays for it comes from. Wonderful, not only do we have people here who have their heads in the sand unknowingly , we have those who volunteer to do it. I can guess who you voted for.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
The parent is not flamebait. You may not agree with the opinion, but the poster is making a reasoned argument. If you can't understand that, you need to turn in your mod points.
IBM used to stand for I've Been Moved;-}
They can use the Outsourced empty IBM and Bankrupt Nortel facilities in the Research Triangle Park.
I think Apple will take a page out of Nintendo's book and reinvent casual, portable gaming.
Would that be the iBoy?
Or maybe the iDS, which will also monitor your network :D
I wonder why they didn't pick Austin? They already have the iTunes/iPhone/customer service division here. There's a ton of talent with UT and lots of other tech companies in town (AMD, Freescale, Dell, to name a few). Real estate and taxes are cheap. Austin has recently been rated the #1 job market in a couple of magazines and is consistently at the tops of quality-of-life ratings. As we say around here, the worst part about Austin is it's surrounded by Texas.
...and Skyline Drive will be rename iSky.
"Even if you're on the right track, you'll get run over if you just sit there" - Will Rogers
seems like that would be a lot of xserves
what does apple use in the data center when they don't need to show off their flashy expensive hardware
... I guess anecdotes (from another state) will have to do. Realistically, the answer here is almost certain to be that a bunch of these people lost enough money that they weren't millionaires anymore. We could just do the same tax raise at the federal level - it's not like all that many people are really going to move to Monaco to avoid paying what's really not that much extra money.
That the middle class pays the vast majority of Social Security and Medicare taxes... a fact that is conveniently left out by the rich (and their minions). Rich people complaining about the crushing burden of taxes... cry me a river.
If you had kept the post to just the first sentence, you could have gotten a BS "informative" mod too...now here's hoping you get a real informative mod at least, for the 2nd paragraph...
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
"That's nearly twice what Google spend on a datacenter" - yeah. They'll likely stock it with Xserves, rather than decent priced hardware!
I want to be a server farmer. I'd wear overalls.