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."

Detroit?

Some of these firms should really start looking at warehouses in Detroit. If you can secure the facility properly, you can get TONS of old warehouses and factory floors for very little. Look at the conversion that Wayne State did with techtown [techtownwsu.org] - they converted an old abandoned warehouse into usable high-tech space (and the real estate was virtually free).

Re:Detroit?

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:Detroit?

Some of these firms should really start looking at warehouses in Detroit.

Do bullet proof vests come included?

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

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

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

I wonder if anyone has run feasibility studies on building datacenters in abandoned underground facilities?

enough already with the elaborate plans to turn your room in your parents' basement into a fortune 500 company!

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

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?

oh for crying out loud. It amazes me the lack of thought outside the box people have.

Options...

1 - spend very little and build seperate enclosures inside the wearhouse that hold the libert units for environment control and the servers in data-center pods.

2 - go uber cheap. Buy a bunch of camper trailers that are gutted and put the servers inside those parked in the wearhouse. works great and I have seen several startups that did exactly that. this also works very well for rental property as you can pull up stakes and move your datacenter within minutes of getting your data pipes into another cheap wearhouse.

the best option and the one usually does in these types of datacenters is the first. you can hire simple general contractors to build interior walls with roofs that are only 10 feet high and insulate the crap out of them to make the perfect datacenter within 5 - 30 days.

It's the mentially retarted CEO's and Venture Capilolists that think you need to spend 80 million dollars on a flashy facility with lots of glass and artwork and special "touches" that only impress clients that will never go there or see it.

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

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

Other posts have dealt with what you might need to get a datacenter running in one of these places. A good analogy, I think, is if you were to go and build a power station. A power station needs the following things-

1. Access to a large body of water cuts costs immensely when dumping the heat from the beast. Fresh is preferred but not required.
2. Access to high voltage lines, or a short distance to one that can be tied into. 34.5 and 105kV lines are expensive to build and maintain on a long-term basis.
3. Access to fuel. Ideally rail, ship, or pipeline, because power plants burn massive quantities of fuel. Trucks do not cut it unless the distance is extremely short.

I recently worked at a power station that was originally built with none of these things. The only people to ever make any money from this white elefant were the contracters that built it.

Build your datacenter near a large body of water (or maybe in Juneau?). Build it near a power station (or build your own steam plant?). Build near some big strands of fiber. Being in the middle of nowhere for the sake of being in the middle of nowhere only profits the contractors.

esp banks...

I work for a large financial institution.
We have a LOT of data...and not just account data.
Back in the 80's, the standard was two mainframes in the same room, back-up
tapes kept on and off site, and a contract with a company to supply a DR computer
if it was ever needed.

Cut to 2006...
We have dual fully redundant data centers, each with many mainframes, and pipes
big enough to drive a dump truck full of bits between the two.
A third one is about to open and a fourth is under construction.

Most of this is for SOX.

Re:esp banks...

SOX is shorthand for Sarbanes-Oxley Act [wikipedia.org].

In QUINCY?

I grew up in Moses Lake, WA, which is about 30 miles SE of Quincy. This should be going into Moses Lake, but it isn't. We have goddamn fiber optics laid all over that town (and the county, exempting Quincy due to some sort of contract the PUD had with Verizon, I believe) going right up to people's houses. I enjoyed a 100Mbps symmetric connection for a while...then my bandwidth got capped. In fact, the PUD is charging the service providers so damn much for bandwidth, some have to cap it at 1Mbps down/512Kbps up. That's slower than fucking DSL and Cable! The local PUD is sitting on a fucking GOLDMINE and they're not doing a goddamned thing about it! They could have easily wooed MS and Yahoo into Moses Lake to build their datafarms there using the PUD's fiber network through the local providers (the PUD can't sell service, so they sell the use of the network to ISPs) and made things better in the town. But they're not doing shit. They haven't been doing much to promote, pitch, or package it for big guys to come in and build a major server farm out here. It pisses me off to no end to see those fuckers doing so little to help that town, and it needs all the help it can get. AAARRRGGGHHH!!!

I don't buy it

The Westin Building [officespace.com] (no not THAT office space) still has plenty of space, including the entire 5th floor!

So what you're saying...

is to wait until this new tech bubble bursts and get Super-Amazing Data Roxors TM for a fraction of the price. Seriously. The future is going to have so much storage and computing power for so damn cheap, it makes me feel a little something funny inside. Is this what they call "Love"?

Humble Suggestion.

As we know worker moral is important, and considering the traditional living arrangements of your standard computer geek, it stands to reason that they should build their data center in the most awesome basement [triggur.org] ever built! Hey, one can dream can't he? To the batcave!

So much for..

my plan on building a data center as a business.

Costs haven't changed that dramatically

It's incredibly uninformed to talk of costs in terms of total dollars!

The old metric was in $/sq. ft., and today it is better to talk in terms of $/kW given higher densities.

For a wide range of data centers, the building shell cost is around $100-250/sq. ft. An enterprise (EIA 692 "Tier 4") data center costs about $22k/kW, plus the high end of the building shell cost. A "Tier 3" data center is closer to $20k/kW and $200/sq. ft. When you drop to Tier 2, you cut the cost in about half, at $12k/kW.

The only costs that have risen dramatically recently are generators and copper, which have a one-year lead time for big engines typically used (1.5-2+ MW) for the generetor, and about triple the cost three years ago for copper-- maybe a 15% premium maximum for a large data center.

Costs get much more complicated when you talk about provisions for future expansion and site constraints.

As for energy costs, yes, cheaper electricity is good for a data center. A 2MW data center will save about $350k/year if they can drop their electricity cost by $0.01 per kWh!

Re:Costs haven't changed that dramatically

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]

duh!

outsource the data warehousing to another country

here in egypt, electricity, water and petrol is cheap in comparison to other countries. datalinks are (according to my isp) via submarine cables, satellite and redundant submarine cables to to american and europe.
AND there are free tax zones to build in too.
only problem? the isps here have not interconnected themselves to each other meaning to go from isp A to isp B the packet must travel to europe/american first - and yes i dont know the technical term for this agreement.

Because they can

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.

NSA Listening Center

I'm sure that the recent expansion of the Yakima NSA listening center just down the street is only a coincidence.

Time to Build Datacenters

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!

Equinix is expensive

Equinix is insanely expensive. I considered moving my company's colocation into Equinix's Ashburn VA facility but I ended up choosing more space at two others for half the price. Equinix has a beautiful place but I can't for the life of me figure out who actually needs biometric locks on the cages. That stuff isn't cheap.

building out datacentres cost soaring

The cost of building out datacentres has been soaring for several reasons, the first real issue is being able to provide enough power for todays power hungry servers to run at any sort of density required to actually churn the data. We see datacentres only able to offer very low amount of power per square meter in the UK, which is very low and can often only provide you with upto 4 quad processor XEON servers per rack. When you can only have that density the cost is much greater. The other aspect is how do you cool it, the traditional airconditioning raised floor method really does not work as its almost impossible to actually cool where you have to cool and there will always be hot spots even if your doing warm row cold row designs etc. Its important to seal the cool air in and funnel it to where its needed. APC have recently been working heavily in this area and claim to be able to cool MASSIVE amounts of density. The other issue is the management aspects of these datacentres. In the past you could design a datacentre to be good for 5-10 years now its hard to design something which will be good for the same length of time becaues the power requirements, cooling and power grid is something that is often over utilised (as per in the UK datacentre market).

The price of AJAX

This is the price of AJAX. If users are constantly going back to the server in the middle of a page, you need more server capacity. Really, the AJAX approach is a hideously inefficient way to update a form. We're now seeing the price of that.

The prices aren't really soaring.

it just seems that way after the big Pentium D migration.

ultra-low consumption dedicaced servers

French Iliad SAS (the parent company of the ISP Free) just started a cute server renting business in a former Exodus datacenter.
The point of interest is that servers are fanless, built on low-consumption VIA processors, and consume about 20W/server.
That should make the cost of operation much lower than traditional hosting...
See details on http://www.dedibox.fr/index.php?rub=offre [dedibox.fr] (in french)
Pictures of the datacenter: http://www.dedibox.fr/index.php?rub=datacenter [dedibox.fr]

A case for solar power

With electricity costs being a dominant factor in the selection of a data center's location, building one in a sunny desert begins to make sense. You use solar power for the servers; for round-the-clock operation you build centers around the world. Unlike electricity, bits are easy to transport from the place where they are produced to the place where they are consumed.

Code Quality: The Open Source Perspective [spinellis.gr]

Like everything else, do it in India

Everything is cheaper in India. Then build out sufficient bandwidth to connect everything here to there. See it's not just about pesky American wages - it's also about pesky American real estate prices, utility costs and whatnot.

computers use 3%? 10%? of US electrical energy

I've seen a number of conflicting estimates on how much power computers and digital devices use.
One source decries widescreen TVs as the "SUV" of the 21st century . The average plasma TV consumes more power per hour than the average refrigerator, the previous household energy hog.

Costs

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....

Perhaps Microsoft

Should be using VMware Infrastructure 3 :)

My company is building a new DC in Texas too. We are doing it on our existing campus by gutting and renovating an older building but the costs are still going to be huge.

In the meantime, I've been building one of the first VMware ESX environments our company has ever used. It started out as a simple 6 host server environment but has grown to over 20 DL 580s and 585s hosting hundreds of Virtual Machines. The initial investment is high but the operating costs are lower, the cabling costs are lower, the HVAC costs are lower, and of course, a VMware host server takes up less real estate.

If my company had focused on VMware, or virtualization in general, early on, they wouldn't need three datacenters and they wouldn't be building a fourth.

Re:Microsoft in Texas?

It's probably due to the fact that pretty much all of Texas is wired for oodles of bandwidth, there is very little inclement weather there, tech workers are a dime a dozen, and there are less taxes in Texas, which would attract all those tech workers who are a dime a dozen. Likewise, several large players in the telecom and high-end server market have major presence there. It's not hard at all to figure out why they are scoping Texas. It's cheaper.

Re:Microsoft in Texas?

Nah, I'm probably just being a consipiracy nerd. It's clearly just sheer coincidence.

No, you are being a conspiracy twit. And it's not like Texas is just some run-down oil and cattle bubba hub. Ever heard of Texas Instruments? Or maybe Dell? Or big hosting operations like Data Return? The tax situation there is favorable, they don't have the incredibly high cost of living that you find in the Seattle, or Boston, or San Fransisco, or Northern Virginia areas... there's plenty of reasons to run a business unit in Texas. And I can think of a lot of reasons why places like WA or OR are overtly hostile to employers and short on places to house employees at anything like a livable rate. The question isn't "why not in WA?" - the question is, "why would they choose to put new operations in an unexpandable, crazy-cost-of-living area like the Pacific NW?"

I say this while living in the DC area - another spot that you'd have to be insane to build a new datacenter in. I've got all of my stuff parked at an Exodus->Cable & Wireless->SAVVIS facility, and there's simply no more room for more of the same.

Re:I don't buy it.

This is the software/IT industry, they're not used to waiting 5 years to start earning a 10-20% return on investment that the rest of the working universe has to put up with.

KFG

Re:Who gives a shit?

I wuz modded troll. Woohoo! I was hoping for Flamebait.