Data Center Building Boom In Silicon Valley

1sockchuck writes "Data center developers are building like mad in Silicon Valley, with seven active projects in Santa Clara alone. The building boom includes the resumption of several stalled projects that prompted concerns of a shortage of wholesale data center space in the Valley. The flurry of construction activity is different from the overbuilding during the dot-com boom, which was characterized by too much funding and too few customers. This time, industry experts say, the end of a funding drought has created a situation in which construction is struggling to stay ahead of demand from companies like Facebook — which just scarfed up an entire new data center in Santa Clara."

Comments

sure sure

[timmarhy]

"The flurry of construction activity is different than the overbuilding during the dot-com boom"

thats what they all say.

what about when the next fad comes along and facebook is forgotten over night?

Re:sure sure

[nacturation]

what about when the next fad comes along and facebook is forgotten over night?

If you subscribe to the theory that Facebook has built demand, then that demand (with the corresponding need for servers) will shift elsewhere. If it ends up being that a large part of the demand simply vanishes, then yeah... they will have overbuilt.

Re:Strange move

[evilviper]

So, people are constructing new data centers on some of the most expensive real estate in the USA, in an area with highly paid IT workers

The price of the land is pretty trivial, as relatively little is needed, and lots of money will be made with it over the next few years.

IT workers are highly paid as a side-effect of being the most highly skilled people available. Put a data center in Oklahoma, and you'll find some nice cheap IT workers, who have very little idea what they are doing. In a competitive market, the employees have to be just as competitive as the employers. The ample supply of highly-skilled labor is exactly why companies want to be there.

with zero company loyalty

See above. "Company loyalty" is actually a negative symptom. All those I've seen who have been employed at a company for a decade or more, do so because they are sufficiently incompetent to not find better pay or challenges elsewhere, but are just good enough to provide some value to the company.

There have been many papers written on the fact that, as pay increases over the years, the relative cost/benefit to employees goes down. Short-term employees is actually a preferred option. And frankly, if companies needed or sufficiently wanted employee loyalty, they just need to reverse the past 20+ years of taking away all benefits, but they'd rather not do that. Only a fool is loyal to a company in this day and age.

and an area of high electricity rates.

We're talking, what, 50% more expensive than the cheapest reliable electricity in the country? While it's not the cheapest, it isn't terrible.