What Should Be Considered When Choosing a Data Center Location?: Microsoft's Climate Challenge

Mike Allen
May 15, 2014

"In late April, Microsoft announced that it would pass over Washington as a potential location for its newest data center. Instead, the tech giant chose Iowa, noting that its $1.1 billion West Des Moines facility would take advantage of the state's data center tax incentives, reported the Seattle Times.

Because the Iowa legislature was quicker on the draw with offering tax breaks, Microsoft elected to invest in the state's growing technology sector. The company announced that it would invest $2 billion in the Iowa data center, which is planned to be more than 1 million square feet and will be one of the largest data centers in the state. Washington, on the other hand, could not confirm benefits fast enough for the company, and was thus left empty handed.

While this was touted as a win for Iowa - and a major loss for Washington - the tech powerhouse may have bitten off more than it could chew when it selected Iowa. FierceEnterpriseCommunications stated that the tax incentives being provided by the state - which totaled $20 million - may be spent on electricity bills now that Iowa's historically mild climate seems to be shifting.

Previously, Iowa was known for a temperate climate, with a favorable humidity percentage and mild temperatures for much of the year. Recently, however, the region has seen major changes as far as its natural climate. For example, Iowa officials reported record low temperatures in July, 2013. The state also experienced some of the highest temperatures in recent memory this past May.

""These extremes are so brutal, they're tearing Iowa's urban infrastructure apart like an old accordion,"" wrote FierceEnterpriseCommunications contributor Scott Fulton.

This may have an increasingly devastating effect on Microsoft's colocation data center plans. Wider temperature ranges will likely translate into an increased reliance on the facility's temperature controls, which ensure that computing equipment does not become overheated. Furthermore, rising use of the cooling system will mean boosted electricity costs, as nearly half of the energy consumed by the typical data center goes toward cooling. Fulton noted that the company's $20 million tax break would buy about 245 million kilowatt hours of electricity. However, if the climate patterns remain the same as they have been recently, this energy could be used faster than Microsoft would expect.

""Microsoft's new data center will be an estimated 1.16 million square feet, for a rough estimate of 696 million [kilowatt hours per square foot] consumed annually,"" Fulton wrote. ""At Iowa's prices, that's a little over $56.7 million in annual energy costs. So the $20 million tax break is worth a bit over 4 months' worth of electric bills.""

What to consider when choosing a data center location: Climate and weather patterns
Microsoft's case illustrates the importance of factoring in the potential site's surrounding climate and recent weather when choosing a data center location. While this type of event would be difficult to predict, the company could have taken a closer look at the weather the state saw within the last year to get a better picture of the changing environment.

Intel also noted that environmental conditions are an important consideration, ranking it as one of the top three criteria for colocation data center sites. This should include the local climate, which can have a significant impact on cooling, as well as the instance of natural disasters.

""Climate - the weather conditions prevailing in an area in general or over a long period of time - is a key consideration when we look for a data center site,"" Intel stated in a February 2014 white paper. ""We avoid sites that experience excessive wind, ice, or natural hazards such as poor air quality, floods, earthquakes, or volcanoes.""

Data center tax incentives offered by a particular state
TechTarget's Matt Stansberry also suggested researching the data center tax incentives being offered in the state. This can include a range of perks like breaks on property taxes or an exemption from sales tax on items purchased for the data center. However, each advantage requires the operator to complete a set of requirements, such as investing a certain amount of capital into the project, or making a specific number of jobs available to local applicants.

The site's proximity to fiber and utility resources
Intel also noted that the other top two factors in their three-part equation are the location of power and WAN resources. If the location has a close proximity to fiber optic lines as well as a local utility provider capable of always providing the data center with a steady stream of electricity, this consideration may make it much more attractive than other potential sites. When evaluating WAN resources, examine the available capacity, the system's redundancy and reliability to ensure that the structure will have the necessary network support. Similar thinking goes into an investigation of the region's power infrastructure.

""Ideally, the data center's power grid should be powered by two utility providers with good power quality to enable redundancy and reduce risk,"" Intel stated."



    Mike Allen

    "In late April, Microsoft announced that it would pass over Washington as a potential location for its newest data center. Instead, the tech giant chose Iowa, noting that its $1.1 billion West Des Moines facility would take advantage of the state's data center tax incentives, reported the Seattle Times. Because ...