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:sure sure

[davester666]

Um, I would be more worried about electrical capacity.

It's not like California is overloaded with the stuff...

Re:sure sure

[William Robinson]

"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?

Maybe. But it could be true as well, if you kind of believe in Gartner's hype curve. I do, because, I have seen many things going through that phase of disillusion and pick up again when time comes. Maybe dot com is going to become part of steady growth.

my 2 cents.

Re:sure sure

[Surt]

The main reason to locate in CA is latency.

Re:sure sure

[Trepidity]

I hear that argument, but is CA really some sort of global optimum for latency of a data center? It's a reasonably well connected location, but I can't help but think it's being somewhat overvalued because many of the engineers are in CA, and it lowers latency to them. But most users are not in CA, and isn't latency to the end-users the main issue?

customers

[seanadams.com]

During the dot-com boom, as I recall there was no shortage of customers for data centers, and every one I visited was filling up new space as fast as they could equip it. Mostly with expensive servers that were underutilized. The problem was those customers were ultimately not viable. They weren't building "on spec".

Still I agree that this rising demand on the tail of the recession is a good sign, for the valley in particular.

Re:customers

[oldhack]

"The problem was those customers were ultimately not viable. "

But Facebook is completely different.

Hehehe.

Re:customers

[the_humeister]

What I don't understand is why build the data centers in Silicon Valley? Why not build somewhere cheaper, like the midwest, and have the sales office in Silicon Valley?

Re:customers

[TheKidWho]

Because the engineers are in Silicon Valley.

Re:customers

[An dochasac]

Yes the engineers and customers are in Silicon Valley, that's fine. But we have this thing called the Internet which means it is no longer necessary to put data centers anywhere near the customers or engineers. And if it's not necessary, it makes absolutely no sense for servers to compete for space in one of the most expensive real estate markets in the world when there are billions of acres of wasteland that would work just as well for a server farm. I've used a thin client desktop with the servers hosted over 3000 miles away and the latency was better than it was when the server was hosted only 8 miles away. Only video games and the kind of hyperactive trading that led to this month's stock crashes have latency requirements which would be significantly impacted by having your server in central valley or the Midwest or Iceland or Offshore and you will save an enormous amount of real estate and energy costs. I'm convinced that high-level corporate decisions are still based on inertia and nineteenth century factory-whistle mentality.

No real space shortage

[parallel_prankster]

Nobody wants to pay the ridiculous land prices for storing machines and blowing cold air on them. If you come to Silicon valley you will see that there is so much space everywhere. But real estate is crazy expensive. They could totally build data centers a little away from here, it may just be easier for them to have data centers closer for reliability/availability etc etc purposes.

Re:No real space shortage

[rachit]

Real-estate has been a lot cheaper in the area after the mortgage meltdown.

Yes. From too-bloody-expensive to merely still-too-bloody-expensive.

Re:No real space shortage

[Surt]

Well, it was nice for me in that it went from looking like my savings would never catch up with the rising down payment requirement for a decent house, to I'm living in one now.

And having spent years wishing I could afford a house as they were bid up by people with nonsense jobs, it felt rewarding to buy a short sale at a 45% discount.

Strange move

[sunderland56]

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 with zero company loyalty, and an area of high electricity rates. Note to self: do not invest in these companies.

Re:Strange move

[uniquegeek]

... and how far from a fault line? Seems about one of the dumbest place to build one to me as well.

Re:Strange move

[timmarhy]

so who builds the systems, designs the floor layouts, maintains the hardware?

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.

Re:Strange move

[masterwit]

"Zero company loyalty"

Well most ignorant investors, well invest in talent. But honestly I think this is very intuitive... I have an MBA and decided that was not for me. (now a math / programming, but judge all you want idc) you nailed the business perspective my friend and well, I will still invest. But in the same sense, because I must be the devil's advocate: you can never know the market. Name a better place? Where else will you find talent on demand, I'm sure there is a place, but add infrastructure into the equation. Hey help me fellow slashers of info, is there really a better place for this to be situated, we need talent and little infrastructure investment? (the "we" is used loosely) I am not be arbitrary here, just asking for where would be better?

Just a humble opinion, don't judge...

Re:Strange move

[Anonymous Coward]

Note to self: Invest in the disaster recovery industry

Re:Strange move

[Trepidity]

There are more total tech employees in Silicon Valley, but I haven't noticed any higher average quality as compared to Boston, Altanta, Austin, Seattle, Portland, or other such places.

Re:Strange move

[tompaulco]

Put a data center in Oklahoma, and you'll find some nice cheap IT workers, who have very little idea what they are doing.
I think you will find that there are plenty of well-educated, intelligent IT workers in Oklahoma who choose to be here because they are willing to trade off 25% lower salaries for being able to buy a home for less than 1/4 what it costs in larger markets. Plus Oklahoma City was voted by Forbes as the most recession proof city.
I enjoy living in Oklahoma. Relatively balmy winters, a little hot in the summer, but not unbearably so, and I live in a 15 year old 3 story 5,000 square foot house on an acre of land within 7 miles of the center of Oklahoma City. I purchased it for only $255,000. Oh, and the economy is not tanking here. My house is worth over 50% more than when I bought it 8 years ago.
There are several thriving data centers here in Oklahoma City. Our company was entertaining data centers in the LA area and Atlanta, and we actually had one in Dallas, but it turned out to be much better for our pocketbook, uptime and customer support to have it in Oklahoma City.

Re:A lot of commercial real estate sits empty

[bezenek]

Several former office-space buildings are being converted to data centers.

In a regular commute from West San Jose to the Google-plex area in Mountain View I have seen these changes. An existing office building has its windows removed/covered and then a sign goes up showing data center space available or the name of a data warehousing company.

This conversion seems less wasteful as far as materials, but I am not sure how using an existing building compares to building a data-center-specific one for long-term energy efficiencies.

-Todd

Power density?!?!

[mcrbids]

Don't know if you've ever taken a look outside a data center, but they often have multiple, high-voltage power feed dead-end at the building. At my current colo, the excellent Herakles data center in Sacramento, CA, they are literally located directly under a major set of power lines.

So you take some office building that was burning perhaps a couple hundred watts per 100 SqFt during mid-day, and colocate 42U racks within, raising energy density from maybe 200 watts/100 SqFT to a few thousand. To give some idea, I personally oversee about 3,000 watts in a single 1U rack at my colo, well over 200 cores, and many terabytes of data. And that's in a single 1U rack, maybe 24" wide and 36" deep, with some allowance for aisleway... and my situation isn't even mildly unusual.

We're not talking 3,000 watts capacity, we're talking 3,000 watts 24x7 continuous draw, of redundant, backed-up power - the most expensive kind. Whole houses usually don't draw this much. And this is a *single* 42U rack.

This is feasible? That's a *lot* of power...

Re:Power density?!?!

[georgewilliamherbert]

Obviously, you build a new power entrance, transformers set, etc.

Which is cheap, compared to the generators and UPSes to switch over to in case the mains go poof.

The AC system and chillers will cost more than the mains feed, less than the UPS / generators.

Raised floor isn't cheap, but it's cheap enough.

Once you've done a bunch of datacenters with multiple thousand systems per building, it's just a question of statistics.

Training/certification

[TouchAndGo]

Just out of curiousity, what sort of job experience, schooling, certification etc. would they be looking for for jobs at these data centers?

Re:Training/certification

[timmarhy]

cisco certification, MS certification (not just MSCE...). work experience in another data centre is an obvious plus, but any experience managing large networks and server would do.

it's more about who you know nto what you know still

I'm not impressed

[syousef]

We're not talking 3,000 watts capacity, we're talking 3,000 watts 24x7 continuous draw, of redundant, backed-up power - the most expensive kind. Whole houses usually don't draw this much. And this is a *single* 42U rack.

This is feasible? That's a *lot* of power...

What are you on about? 3kW is nothing and many 2 story houses running an airconditioner run 5 times that! Sure it's not backed up and unless then owner is rich or insane it's not running 24x7 so you may have some point on expense, but to put things in perspective 1000W vacuum cleaners are relatively weak. Again I'm not suggesting these are run 24x7. But we're not talking the power out put of the sun at 30 paces when we're talking 3kW.

Similarly "many terabytes" is unimpressive when I can get 2TB drives for well under $200 and 200 cores ain't so impressive when a standard mid range desktop comes with 4 these days.

Re:I'm not impressed

[ricky-road-flats]

What are *you* on about? 3kW is a lot, when it's 24x7x365. Add it up. The house you mention is very unlikely to add up to anywhere near 3kW constantly for the whole year. The comparison (and your other about the desktop PC) is insane, and here's why:

His is one rack, in a row of dozens, with (unless it's a very small datacentre) dozens of rows.

All the customers in all the racks are trying to maximise their utilisation of the rack (extra racks cost more), and the utilisaton of the systems in those racks (more computers cost more). Each of those hundreds of racks needs multiple kW (some more than 3, not many less than 2 or so), with huge reliability.

Now add nearly the same amount of power again to cool all those racks, to keep air passing over them all. As well as powering the chillers, and driving the air down many channels to get it to every intake fan in every rack, all of which needs to have very good filtering (usually HEPA), and add on dehumidifying on top.

Multiple feeds into the building from the grid, UPS protection, surge protection, switching between live feed 1, live feed 2, and UPS power all has to be seamless enough to not bother a nodern computer - it all adds up to a very hard job. Yes it's an established process, but that doesn't make it easy.

Your midrange desktop with 4 cores - you couldn't get more than around 20 of those in a single rack, and you would be drawing way more than 3 kW to drive them. To get 200 cores and storage (and presumably some network kit too) into a single rack is still impressive now - and for it to draw only 3 kW is impressive - they must be very efficient units.

Add in the hard drives, RAM, fans, lossy power supplies, chipsets, switches, etc.

Oh, and very few professionals would use 2 TB SATA drives in a datacentre setting. Most units nowadays use 2.5" drives, and in the SAS world that limits you to 300 GB fast ones or 450 GB slow ones - 600 GB has been announced but it takes a while to become actually used. You need more though, as you need RAID to protect against failures. That frequently means installing double what you need in terms of raw storage. Then, you throw in a few hot spares for good measure. It all adds up.

This makes sense if you look at all facts

[Whuffo]

One thing that the commenters here have overlooked is the availability of direct connections to the Internet backbone. The biggest nexus of end and peering points is right there in Silicon Valley so hooking into huge bandwidth is much less expensive than it would be in other locations. Is the property cost too high? It used to be, but these days there's plenty of vacant space and the costs have gone down substantially thanks to the recession. There's plenty of electrical power available and it's in close proximity to a very large population of internet users. What's not to like?

Those who see this as a boom that will produce jobs that are worth moving to Silicon Valley for are best advised to stay home. The recession has hit the IT folks there very hard and there's about 30% unemployment in that field. Data centers aren't places that require large staffs; one or two people to monitor the systems is about it and they'll do it all from moving servers around to fielding support calls. There's nothing there for people coming from out of state and nothing for the folks that are already here. Many of those H1B workers and illegal aliens have already left for home and more are leaving every day; even the slaves are bailing out.

Facebook has already jumped the shark, so their build-out in Silicon Valley will become even more vacant space in the near future. Green energy was planned to be the next boom but it's stillborn so the hard times in the valley are going to continue for now.

Really - if you're thinking of moving to Silicon Valley from out of state - stop now. The chances of employment are very slim and the expense of living there is very high; the best you could do is submit resumes until you run out of money. You're better off almost anywhere else.