Data Center Site Selection
Some of the top criteria that companies use when selecting a data center site include operational costs (especially the cost of power), the security of data, and the quality of internet and broadband connectivity.
The Cost of Power
- Data centers are power-intensive, with those in the US consuming power equivalent to that consumed in 5 million US homes. A data center incurs higher operating costs than any other facility, with energy costs making it to the top of the list.
- According to CB Insights, "data centers currently account for 3% of global electricity consumption. Power surges and network outages can severely increase data center downtime and associated expenses, so owners should evaluate the state and reliability of available power infrastructure and network connectivity for their data center."
- The cost of cooling power is also a pain point for data centers. According to an Amazon presentation, "an eight-megawatt data center could have more than 46,000 servers at a cost of $11 million per megawatt and a power cost of roughly 7 cents per kilowatt-hour. For every watt of power to run a server, another watt is being utilized in cooling power."
- Companies, therefore, choose locations that have low rates of electricity and access to at least two power grids, which should be mature. Apple, Google, and Facebook have built data centers by considering proximity to hydroelectric sources.
- The Midwest US, in general, is experiencing a data center boom because of its central location between two coasts, providing increased network connectivity and access to low-cost power.
- Missouri recorded the lowest electricity rates as of November 2019, at 9.79, a 5.2% decrease from the previous year. Illinois and Indiana, however, were 13.32 and 12.39, representing a decrease by only 1% and 2.1% from the previous year, respectively.
- "Missouri’s weather, with a four-season climate and an average annual temperature of 57 degrees Fahrenheit, enables free cooling for data centers for up to half of the year (NOAA,Comparative Climatic Data through 2010)."
- Illinois is also a hub for data centers, considering that most of its power is from non-carbon sources such as wind. The state of Illinois has the largest number of power plants among all the other states.
- "Data centers obviously use a significant amount of power, and in conjunction with high-efficiency cooling designs, electricity rates have the greatest influence on data center operational Total Cost of Ownership."
- Lakeside Technology Center in Chicago Illinois is strategically located where there are over 53 back-up generators to minimize outage.
Security of Data
- According to an article by Ross Warrington, an expert with more than three decades of experience in the colocation business, 7 out of 10 data centers experience data loss due to natural disasters. Six of those companies fail within six months.
- Ross goes on to say that anything could go wrong, from hurricanes, lightning, tornadoes, flooding, earthquakes, and unexpected events.
- The Midwestern USA is especially prone to natural disasters, like the Bomb cyclone, which happened in March; April tornadoes; and heavy rains in May and June.
- According to Suzanne Malec-McKenna, the former commissioner of the Chicago Department of Environment, Chicago is unlikely to face natural disasters such as hurricanes. It is, however, vulnerable to other disasters such as snowpocalypse and flooding.
- Illinois was ranked 5th among the U.S. states most prepared for disaster, with the most common disasters being floods and lightning that take place in June. The ranking was based on the number of disasters in each state, funding, response, and infrastructure.
- Missouri is considered a low-risk state for security threats of terrorism, and natural disasters such as hurricanes and earthquakes. FEMA reported that the state had not experienced these disasters since record-keeping began in 1957.
- Some major companies that have installed data centers in Missouri are AT&T, Centene, DST Systems, Enterprise, Express Scripts, MasterCard, Mercy Health, Thomson Reuters, and Walmart.
- Indiana's natural disaster preparedness is in question, with credible sources indicating that the state has inadequate funding. Some major disasters include flooding and tornadoes.
Access to Fiber Networks and High-Speed Internet
- According to a CB Insights 2020 report, access to fiber networks is critical to the efficient functioning of data centers by easing congestion and making services faster.
- The state of Virginia and neighboring areas are hotspots for data centers because of the excellent fiber-connectivity built by AOL.
- Companies consider excellent fiber-optic connectivity to be able to handle large volumes of data and transmit it at high speeds.
- Chicago Tribune reports that companies want to set up data centers in Chicago, and a significant factor is its fiber-optic connection. The fiber-optic cable used to run the internet was placed on railroad trucks, hence connecting the east and the west.
- According to the 2018 Broadband Coverage Statistics and Average Internet Speed, Illinois had an internet speed of 32.1 Mbps with a broadband coverage of 91.9%, Indiana was at 36.7 Mbps with a broadband coverage of 85.7%, and Missouri was at 38.5 Mbps with a broadband coverage of 80.1%. Illinois, therefore, had the best broadband coverage among the three states.
To determine the top factors that affect the selection of a site for a data center, we compared several reliable sources including trusted media sites and industry and government reports. We identified factors that were consistent in all of these sources. We also considered the practice of top companies with big data centers such as Apple, Google, and Facebook.