Cultivating Server Farms

Reprising a theme that we wrote about on Radar a few months ago (see Cloudy, with a Chance of Servers), the New York Times has an intriguing article about the resurgence of the data center business.

Building data centers was a booming business before the dotcom bust, but that event left over a million square feet of unused data centers. That glut is long gone now, and there’s a rush to build new centers.

The article makes a lot of interesting points — the diversification of data center business beyond technology to mainstream businesses, the rising cost of building data centers (as high as $1000/square foot!), and our favorite, the importance of power as a gating factor.

“The first thing we look at is power,” Ms. Backaus [CEO of Data Center firm Equinix] said. “Getting generators today is the No. 1 thing that will drive your construction schedules.”

Cheap electricity has become so important, it has drawn big companies, like Microsoft, Yahoo and Google, to Washington and Oregon to build their own server farms. Microsoft is building a center of 1.5 million square feet on 74 acres in Quincy, Wash., close to nearby hydroelectric dams. Yahoo is building one nearby and Google is putting up a center across the border in Oregon.

Their moves to the rural Pacific Northwest “just tells you how important power has become,” Mr. Magnuson said. “That’s the driver of the industry now.”