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Main Website >>Real Estate >>Blog >> Data Centers as Societal Infrastructure
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Michael Siteman, EVP - Data Center Solutions, JONES LANG LASALLE, INC.

Data Centers as Societal Infrastructure
Tuesday, June 05 2012 | 08:51 AM
Michael Siteman
EVP - Data Center Solutions, JONES LANG LASALLE, INC.

At first glance, it probably seems like an oxymoron to juxtapose the concept of a data center and societal infrastructure, but the thought occurred to me as I read an article by Jill Bunting on ( The title of the article, Turning Good Data Centers into better Neighbors, makes a point of criticizing data centers as not contributing to the communities in which they’re located by providing a paltry amount of jobs in exchange for plundering local resources (primarily electricity) all the while taking advantage of tax exemptions and rebates that benefit their business operations. Ms. Bunting goes on to suggest that data centers become better neighbors by cogenerating power and giving it back to the grid.

While I thoroughly agree that sustainability and cogeneration should be cornerstones of contemporary and future data centers, the article clearly ignores a host of issues related to data centers, their operations and function.

To begin, data centers are as much a part of community infrastructure as the roads on which we drive. Data centers are becoming inextricably entwined with the power grids from which we receive electricity and the communications networks on which we talk and interact. If all communities had a NIMBY (not-in-my-backyard) approach to data centers, the general level of frustration in our global society would grow at an unprecedented level (OK, that’s a tongue-in-cheek statement). Why? Because we’re all addicted to instantaneous responses from our digital devices. We expect web pages to load without any delay when we type their addresses into our browsers. We expect that when we place a call from a landline or cell phone, that the call goes through immediately. When we send a text message, we want the recipient to respond just like we’re having a face-to-face meeting. We want our entertainment delivered now and without any interruptions. When I turn on my TV and connect to Netflix, I want that movie to stream without any digital artifacts or latency (signal delay). When I visit Amazon or eBay and place an order, I want to know that the transaction that allowed me to buy that item was processed without deferral.

Data centers house the backbone of our technology. These facilities enable us to communicate with and interact with each other over distances near and far. I’m not trying to be melodramatic about the importance of the data center, but just take a look at how important this technology is in relation to our current society.

If we were still an agrarian or industrial economy, things might be different and the data center’s importance might not be as notable. If in order to drive more value to shareholders and create more corporate profits, we hadn’t off-shored the majority of our manufacturing, maybe we would still place more priority on creating jobs than on creating information. But today, the fact that we still grow or manufacture anything is almost incidental to the rest of the business landscape and society at large. We create content; we store information; we peddle statistics, knowledge and reports.

I don’t disagree that data centers should be efficiently designed and operated. For too long, no attention paid to these issues. With the cost of electricity continuing to “amp” up, the rise of corporate consciousness with regard to sustainability as well as a looming carbon tax, data center efficiency has become one of the most discussed, if not the most discussed, topics in the sector. As part of this discussion, cogeneration of clean power has come into the spotlight. The real challenge is finding a methodology that makes as much financial sense as it does social sense.

The cost to construct a data center is enormous. Building a facility that is highly available (has 3 minutes or less of downtime per year) with redundant design and systems ranges between $8,000,000 and $20,000,000 per Megawatt of power that will be installed. Assuming that each megawatt of critical power (power that is delivered to the IT equipment), will deliver about 10,000 square feet of conditioned space, equates to roughly $800 to $2,000 per square foot. Just for a rough order of magnitude comparison, it costs about $250 per square foot to build a conventional office building including the tenant spaces. Adding the additional cost to generate power on site places an enormous burden on the developer, whether that is an enterprise or investor. Also, based on the current level of technology, green technologies aren’t very efficient based on the capital expenditure required. Furthermore, cogeneration requires a fair amount of additional land, which adds another cost to the formula.

I am by no means advocating ignoring cogeneration. I believe that we should continue to invest in new cogeneration technologies and develop new methods to mitigate the pressure that data centers place on the power grid. My point is that data centers are already great neighbors because they support our modern lifestyle and the technological fabric of our society. Data centers and our insatiable need for more information and content are driving commerce. They are improving, not degrading the quality of our neighborhoods, communities and lifestyle.
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