Data Center Location & The Economies of Scale

Each decade, the data center industry experiences exponential growth; from the construction of new facilities to the millions of interconnected IP networks. The most important factors though are that of operational cost and location. In order to reap the benefits of enterprise expansion you must consider the following…

In order to reap the benefits of enterprise expansion, it is important to consider the total cost of ownership associated with data center location. Cost of energy, property tax as well as a regions risk to natural disaster are also things to consider. Wether you are looking to build a new facility or retrofit an existing one, industry leaders agree location is a top priority.

Location Is Top Priority

Tax incentives are what a lot of CTO’s look at when considering a build location for a new data center. For example, rural communities such as Prineville Oregon, will often offer tax breaks to data centers because they know development will create jobs and attract investors to the community.

Utility costs are also high on the list of priorities; what are the local utility costs where you are seeking to build?

It just so happens that Prineville turned out to have a lower cost of living, skilled work force as well a good climate. What else should CTO’s look for?

Consider The Proximity of Backup Facilities

A lot of companies don’t realize that putting two data centers within the same proximity is risky enough. If a natural disaster hits the same area, both facilities could be damaged. Companies don’t usually plan to build one data center, they build two, and backup data to both locations in case one gets damaged. One last area to consider is the that of Green Initiatives.

Energy Efficient Practices

Leaders agree that building backup facilities too far apart from primary data centers are more costly in both time and money. Building in another state may result in higher property tax or energy costs. Utilizing green technologies cuts down on operational costs once the facilities are up and running.

Microsoft’s proposed data center in Wyoming is yet another fine example: if successful, they will be providing renewable energy to the data centers completely off the grid. Even though developing new facilities seems like a fearless battle, the industry has never been more open to sharing its secrets. Companies have shown a renewed interest in sharing industry secretes lately so rest assured, pursuing the economies of scale shouldn’t be so daunting.