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."

Seems to me they should target Rust Belt/non-metro

[patio11]

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.

Re:Seems to me they should target Rust Belt/non-me

[0racle]

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.

Re:Seems to me they should target Rust Belt/non-me

[Anonymous Coward]

Wow... Blizzards and icestorms... I wonder where Russians and Canadians put their datacenters.

Re:Seems to me they should target Rust Belt/non-me

[patio11]

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?"

Re:Detroit?

[Bishop]

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."

Re:Seems to me they should target Rust Belt/non-me

[Fulcrum of Evil]

They're naturally temperature-controlled: anything more than a few feet down is going to hover around 40-50F

Yeah, sure, until you saturate the heat capacity of the ground around you. Mind, the ground conducts slowly, and datacenters have a lot higher power density than your basement.

Because they can

[Anonymous Coward]

Microsoft is not the measure of things, especially not of spending.

That Microsoft spends $600 million on a datacenter is not because they need to,
it is because they can.

Time to Build Datacenters

[bazily]

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!

Re:The price of AJAX

[Anonymous Coward]

This must be the dumbest crap ever reaching "3 interesting" I have ever seen. You seriously think that companies have to get really huge new data-centers because users are accessing AJAX-pages? Secondly, AJAX doesn't in itself have to increase load on the servers, mostly because there's less redundancy going on (read: needless and utterly useless refreshing of too much data which isn't in need of refreshing).

So, what's your problem? You just like to use the words that the other kids are using?

Re:The price of AJAX

[lachlan76]

Umm, AJAX is *more* efficient than a static page. It needs less server capacity because it doesn't require the entire form to be reloaded constantly.

Re:The price of AJAX

[ObsessiveMathsFreak]

It needs less server capacity because it doesn't require the entire form to be reloaded constantly.

Depends on what you mean by "capacity". If you're talking about bandwidth capacity, then yes, AJAX can potentially reduce bandwidth. If you're talking about server processing capacity, then the answer is no, AJAX will not reduce server processing loads. AJAX requires more server software, processing, memory and time than simply having the server rejurgitate a static, or quasi static webpage over and over.

Re:Costs haven't changed that dramatically

[Overzeetop]

You must be building somewhere very near an expensive megalopolis if you're putting up a shell for over $100/SF. Even with services, large industrial buildings can easily be built for under $80 including the land and utilities, and I suspect you could bring a facility in under $50 a square foot in the right places (and that includes the "right places" with big internet pipes). Makes me want to go build a datacenter in Christiansburg, Virginia. Lots of land, Virginia Tech right next door (tech-savvy bodies and fat pipes), cheap electricity (AEP is under 8c/kWh, I think). You can get a shell on a 20,000SF building erected for about $25-30/SF, the land acquisition should be in the neighborhood of $1000-2000 per acre (lots of expansion possibilities), and the local government will probably fall all over themselves to get eh services you need to your site.

You know...just ignore this post. It would never work over there - way to expensive, regulatory hurdles, lousy access. Not worth even looking into, really. Sorry for wasting your time.

Now, where did I put that business plan boilerplate...

Re:Costs haven't changed that dramatically

[WilsonSD]

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/ [cassatt.com]

Costs

[plopez]

This comment cuts across several threads on costs.

Costs alone are not enough. What is needed is a unit cost. For example, is unit cost per user rising or falling? If it is falling but the user base is growing rapidly, you are getting a good deal even though costs may be increasing.

Also, things such as redudent server, backups, power backups etc. should probably be counted as an insurance cost and measured against cost of down time. If the cost of downtime increases much faster than the cost of this 'insurance' then you are probably getting a good deal.

To say 'costs are rising' without a benefit analysis is meaningless.

Also, I wonder how much of this is due to bloated apps and poor design (XML anyone?). Is this explosion in servers due to crappy code and bad data models. I suspect some of it is though it has to be looked at on an application-by-application basis.

And while I am on the topic, multi-tier does *not* mean multi server. I have no idea how this myth got started (hardware vendors maybe?). You can, if you like, run all tiers on one server if your code is not leaky. For security reasons you probably should put your web server on its own box, but then if you have 5 tiers and a DB engine there is no reason why a good server can't run all of them in most cases. Unless, of course, the code is crap.

My semi-informed opinion....