Lawyer Bait

The views expressed herein solely represent the author’s personal views and opinions and not of anyone else - person or organization.

Monday, June 15, 2009

Did you announce you're building a data center too?

There have been several announcements recently about new data centers being built. The mean average per square foot I can figure out is $2,500 per square foot.

So that means that Apples announcement will peg the North Carolina site at 400,000 square feet for the $1B price tag. I am glad I am not an Apple investor or I would be flipping out on a company that is not a data center center builder, manager, or operator spending my money on something that is not a core competency. Especially a $B of my money. Who is running Apple, Obama?

The Yahoo announcement for Lockport, NY and their 60,000 sq ft planned build was interesting too. $150M project and it creates 75 jobs. That's $2M per job created. Again, is the Government making the decisions here? At $2M a job, I want to run the job

Cisco is going to build a 160K square foot building in Allen Texas. $40M is what that will come out to. I would be a little less angry at Cisco for spending my invested money on a non-core competency, but I could maybe justify it as a really sparkly new kick ass laboratory for new stuff.

IBM announced a 6,000 square foot facility for $12.4M. A steal at $2K/ft.

It's kind of funny in that I had 4 requests come in days apart about a month ago asking about build vs. buy whitepapers and current examples. Looks like the big boys went build and I still don't understand why.

The tough questions I would have asked early in the process:

1. What happens when we don't use all the space? How do we turn a data center from single tenant to multi tenant?
2. What is it that makes us think we can run a data center better than those people who do it for a living 100% of the time?
3. What SLA's will our employees sign when we hire them?
4. Where else could we spend this money? To grow revenue? Buyback stock? Create Jobs?
5. What other EXISTING sites were considered that would have led to less of a carbon footprint, less damage to the environment, and been greener?

If you want tough questions to ask for your project contact me.

The other thing that I noticed is that all of these data centers do NOTHING for the impending crisis of data center space that has been widely reported. Except maybe for those companies that are building them.

And what happens when they use 30% of the draw that they contracted for and the financial operating obligations are 70% more than budgeted because they are obligated to pay for their scale up whether it happens or not? How will they justify this to investors?

Believe me, I think data centers are a great investment, and safer than gold right now.

For data center companies.

No comments:

Post a Comment

Tell Us What You Think!