Centers of Job Creation | Business Facilities - Area Economic Development, Site Selection & Workforce Solutions

With cloud computing infringing on the need for bricks and mortar and the Feds consolidating, the competition for data center projects has intensified.
With cloud computing infringing on the need for bricks and mortar and the Feds consolidating, the competition for data center projects has intensified.

Centers of Job Creation

Centers of Job Creation | Business Facilities - Area Economic Development, Site Selection & Workforce Solutions

With cloud computing infringing on the need for bricks and mortar and the Feds consolidating, the competition for data center projects has intensified.

As companies assess their data processing and IT needs, many top executives have their head in the clouds—cloud computing, that is. Many data processing functions are moving onto the Internet. This trend, and a major consolidation of federal data centers, is complicating and intensifying the competition for data center projects across the U.S.

Early last year, Federal CIO Vivek Kundra outlined details of an ambitious plan in a memo that directed federal agencies to prepare an inventory of their IT assets by April 30, 2010 and develop a preliminary data center consolidation plan by June 30. These plans were supposed to be finalized by Dec. 31, with implementation beginning in 2011.

According to a report in Data Center Knowledge, the government data center consolidation has major implications for system integrators, data center service providers (especially in northern Virginia), and cloud computing platforms optimized for hosting government apps. The number of government data centers now tops 1,100, more than double the total of 432 in 1999.

It is expected that the consolidation effort will generate significant business for companies providing energy efficiency tools and consulting—Kundra’s memo indicated that reducing energy costs is a key goal of the consolidation.

“This growth in redundant infrastructure investments is costly, inefficient and unsustainable and has a significant impact on energy consumption,” said Kundra, as reported by Data Center Knowledge. “In 2006, Federal servers and data centers consumed 6 billion kwH of electricity, and without a fundamental shift in how we deploy technology it could reach 12 billion kwH by 2012.”

In announcing the Federal Data Center Consolidation Initiative, Kundra outlined four high-level goals:

• Promote the use of Green IT by reducing the overall energy and real estate footprint of government data centers
• Reduce the cost of data center hardware, software and operations
• Increase the overall IT security posture of the government
• Shift IT investments to more efficient computing platforms and technologies

Based on the last goal on the list, expectations are high that a significant portion of government IT operations will be shifted to a cloud computing model. Kundra’s memo said the federal government is looking for “game-changing approaches” to deal with the growth in data centers rather than “brute force consolidation.”

Further complicating the scenario is the pattern set by industry leaders, including HP and Intel, which indicates that the push for greater efficiency may render obsolete many older data center which do not have the power capacity to support equipment space optimized for energy efficiency. Higher densities created by consolidation also may make pose a challenge to older facilities in keeping equipment operating at the required cool temperature.

Industry analysts project that the federal initiative, while aimed overall at consolidation, actually may result in the growth of data centers in government hubs in northern Virginia and Maryland. According to the Data Center Knowledge report, systems integrators and companies building cloud platforms have been driving demand for data center space in northern Virginia, where demand has been outpacing supply; that demand is likely to increase as federal agencies identify new requirements. If this pattern holds up, the federal consolidation could boost business for server equipment producers, who already are servicing new requirements for the latest more computing power and better energy efficiency.

All of the activity described above makes this a good moment to take a close look at some of the most active data center hubs in the U.S.


Utah Lands NSA’s Mega-Center

Utah made history this year when the National Security Agency (NSA) and U.S. Army Corps of Engineers broke ground on the $1.2 to 1.9 billion Community Comprehensive National Cyber-security Initiative Data Center, officially named the Utah Data Center (UDC).

The one million square foot facility will reside on 240 acres at Camp W.G. Williams, a National Guard training site approximately 25 miles south of Salt Lake City, and is the largest U.S. Department of Defense project in the country. Once complete it will support and strengthen the Intelligence Community by assisting various agencies, including the Department of Homeland Security, in protecting the nation’s cyber security networks.

“The threat posed by computer hackers is very big, and it is growing,” said Sen. Orrin Hatch, R-Utah. “That is why this data center is so important.” The highly secure, Tier III UDC will enhance awareness of network vulnerabilities and risks to prevent invasion. It will provide intelligence and warning to cyber dangers and carry out cyber security objectives to keep computer systems safe.

“In an era when our nation and its allies are increasingly dependent on the integrity of information and systems supported, transmitted, or stored in cyberspace, it is essential that that space is as resilient and secure as possible,” said NSA Deputy Director John C. Inglis.

The construction and development phase of the state of the art facility will bring 5,000 to 10,000 temporary jobs while the finished center will support 100 to 200 permanent positions in 2013. Most of the long term employees at the NSA Utah Data Center will have high paying technical jobs.

They will keep machines in the 100,000 square feet of climate controlled computer space with raised floors operational. And while the computers will require 65 megawatts of electricity—enough to energize a small city—the center will be able to generate all of its own power through backup generators. The additional 900,000 square feet of space at the UDC will be devoted to technical and administrative services.

Striving for a LEED Silver rating, the UDC will incorporate green building strategies. Support facilities will include electrical substations, a vehicle inspection facility and visitor control center, perimeter site security, fuel storage, water treatment facilities, fire suppression systems and chiller plants.

According to Hatch, some of the reasons the Utah site was picked over 37 other potential locations was because of its higher education institutions, language facilities, and considerable number of people who speak multiple languages. Senator Hatch said he also promoted Utah’s favorable energy costs, Internet infrastructure, thriving software industry and proximity to the Salt Lake City International Airport in the bid process.

In addition to the obvious economic benefits, the data center solidifies Utah’s reputation as a technology center and its position as a cyber security leader. According to Major General Brian Tarbet, head of the Utah National Guard, “This will be an important link in intelligence and defense systems to find, fix and kill enemies and to protect American citizens.” Utah is now on the front lines of U.S. cyber security defense.

The NSA Utah Data Center is the crown jewel in the Beehive State’s highly successful effort to create a high-tech cluster of IT, software and data center businesses, one of seven growth centers Utah has identified as the targets of its overall economic development strategies.

The list of major data center players that already have established facilities, or are in the process of building them, is impressive. Among the big names to put down roots in Utah are Oracle, eBay, Twitter, Adobe, Microsoft and Goldman Sachs.

One of the biggest project announcements of 2010 was Adobe Systems Inc.’s decision to build its new technology campus in Lehi. Adobe will build a campus on a 38-acre undeveloped site west of Traverse Mountain and similar to Adobe’s corporate offices in San Jose, California with a skywalk between multilevel LEED-certified buildings. The Adobe project, which garnered an Honorable Mention in our 2010 Economic Development Deal of the Year Awards competition, is expected to create 1,600 new jobs and generate an overall economic impact nearly $3.8 billion for the region [for more information, see page 16]. Adobe is the third computer software company to open offices in Lehi and joins Micron, IM Flash and Microsoft at the city’s north border.

The Topaz data center, eBay’s $287-million facility in South Jordan, UT, opened in May. Topaz will be the primary data center for eBay, hosting and websites. The server farm at the center reportedly will be capable of processing $2,000 worth of transactions per second.

The Tier IV level data center in South Jordan is said to be 50 percent less expensive to operate than the average of other data centers leased by eBay, and 30 percent more efficient than the most efficient data center eBay was using before the new facility opened.

The first phase of the Topaz project is a 240,000-square-foot building housing three 20,000 square foot data center halls for eBay Marketplace,, and to facilitate a future expansion, respectively. The company’s master plan for the site calls for four phases, which will allow eBay to consolidate leased data center space currently spread across three states. eBay is using 400V power distribution, allowing it to eliminate an entire level of transformers and save two percent in power costs.

The data center is cooled using a water-side economizer system, which is supported by a 400,000 gallon cistern that collects rain water. eBay is using outside air to cool the data center for more than half the year. Inside, eBay uses in-row cooling units for close-coupled cooling, and a hot-air containment system within the server area.

Twitter announced in July that it will build its first custom data center in the Salt Lake City area. The company currently manages its infrastructure through a managed hosting agreement with NTT America. According to a Twitter Engineering blog post last summer, the facility in Utah may be the first of series of new data centers that will be built in the next two years to accommodate Twitter’s explosive growth, which includes more than 300,000 new users per day.


Topeka, Kansas Has the Back Office Covered

Where is the optimal location for a company’s data center? It has to be secure, accessible, affordable, and populated by a skilled and smart workforce. The decision to move or expand this critical operations center is heavily weighted by the security and accessibility of the location as well as the cost of doing business. But it truly hinges on where the company will find the greatest understanding of its business.

Being behind-the-scenes in the data center sector requires an elevated level of reliability and consistency. One way that Topeka and Shawnee County are able to fulfill this role so capably is the large population of educated and skilled workers.

With five major universities—including the University of Kansas and Kansas State University—all within an hour’s drive, Topeka and Shawnee County draw on the abilities of over 60,000 students and 12,000 graduates annually. An astounding 36% of the region’s population age 25 or older hold a bachelor’s degree or higher (compared to 27.5% nationally). A high quality of life and a low cost of living is attractive to high-end programmers, network specialists and a multitude of young, educated professionals. Average wages for the financial services and data center sectors are 12% lower than the national average, benefiting the bottom line. Data centers value a premium level of customer and technical support and Topeka’s strong workforce is key to fulfilling customer needs.

A secure locale is also important for data center site selection. Topeka and Shawnee County are located inland with a moderate climate. There is very little chance of delay or difficulty due to natural causes here. In addition, Topeka and Shawnee County are easily accessible, just an hour west on Interstate 70 from the Kansas City International Airport and near Interstate 35 running north and south. It is not an isolated location nor is it a congested or expensive urban center that is vulnerable to security issues.

Data centers locating in Topeka and Shawnee County can count on stability in their operational costs with overhead remaining relatively level. The cost of doing business is low—15% lower than the national average. Energy costs specifically are 24% lower than the national average. Kansas also offers tax incentives including no property taxes on machinery and equipment, up to 100% tax abatement for 10 years available on real property, and no sales tax on materials for facility construction. Topeka brings comfort to companies by making relocation affordable and getting started easy.

Topeka/Shawnee County is home to many thriving and innovative companies who provide goods and services related to data centers. The following companies call Topeka home:

• Bartlett & West
• Blue Cross and Blue Shield of Kansas
• Mize, Houser & Co.
• Security Benefit
• Web File Express

As the trend moves away from outsourcing support services overseas and the cost of locating in urban markets increases, Topeka/Shawnee County is poised for additional growth in back office operations, including data centers. The community already has a significant footprint in this arena (see sidebar for partial listing), and has the resources in place to help enterprises get established and flourish here. With many biological science and health care industries already calling Topeka home, the city is well situated for the anticipated increase in the health care industry data center needs as the nation moves toward digital management of medical records. Technical and customer support for the financial services industry requires a higher level of knowledge, security, and service. And Topeka serves this sector very effectively.

Topeka not only knows how to be bold in business. Growth and change are part of the local culture. In fact, Topeka and Shawnee County are currently undergoing an ambitious visioning program to foster and sustain activities that will encourage growth and enhance the quality of life. Major projects of the Heartland Visioning initiative include:

• Over $400 million invested in downtown revitalization and more on the way, including a new, exciting streetscape
• Developing the Topeka Regional Competitiveness Center to support new and existing businesses
• Supporting a burgeoning arts movement with the establishment of the North Topeka Arts District (NOTO)

Topeka and Shawnee County continue to build upon their strengths and can help companies looking toward the future to do the same.

To learn more about how Topeka and Shawnee County provide the optimal location for data center operations, go to


San Antonio: Center of Cyber Security

The San Antonio Information Technology Industry has experienced a 20 percent growth rate since 2005, a figure that has doubled in the last decade. From 1998 to 2008 IT’s economic impact on the city has increased from $4 billion to $8 billion and the number of sector employees has jumped 44 percent. The industry paid $882 million in wages to nearly 16,000 workers in 2008 alone with an average salary of almost $39,000 (San Antonio). Broken down into two categories, approximately 2/3 of the city’s IT jobs are in products and 1/3 are in services.

Cyber Security is becoming one of the biggest industries in San Antonio. The need for which is only going to grow since it is necessary for business, government, utilities, and educational institutions alike. The University of Texas at San Antonio’s (UTSA) Cyber Security program has been recognized as one of the top in the nation. Backed by Congress and the Homeland Security and Defense departments, the Institute for Cyber Security—Center for Infrastructure Assurance and Security (IC-CIAS) teaches government and private sector employees about cyber security and how to fend off attacks.

San Antonio has an available labor pool of former military personnel and recently graduated students. Last year, the Air Force Space Command moved its cyber command, the 24th Air Force, to Lackland AFB to secure the military’s communication and data systems. The move brought a boon to San Antonio’s bustling defense contracting industry and added 400 highly skilled jobs with annual salaries ranging between $70,000 and $75,000.

The new mission could lead San Antonio-based EADS North America Defense Security and Systems Solutions Inc. to add up to 75 more jobs, said Larry Gosser, company spokesman. EADS conducts training courses that teach network administrators how to secure their computer systems by providing “quality information assurance and secure network solutions…to assure the availability, authenticity, integrity, and confidentiality of information, and protection of information technology resources.”

“Software and hardware alone are not enough to prevent an attack,’’ said Eric Franey, EADS North America’s director of product management. “Every system is vulnerable.” That’s why cyber security is a growing industry. San Antonio is a hotbed of cyber security activity with dozens of military contractors specializing in information security, including L-3 Communications for command, control and communications, intelligence, surveillance and reconnaissance (CCISR), government services, aircraft modernization and maintenance (AM&M) as well as homeland defense products and services; Booz Allen Hamilton, a management and technology consulting firm; CACI, for professional services and IT solutions in defense, intelligence, homeland security, IT modernization, and government transformation; SAIC, a provider of scientific, engineering, systems integration and technical services and solutions; SecureLogix, which secures voice and UC networks; and Southwest Research Institute, specializing in the creation and transfer of technology in engineering and the physical sciences.

A big boost to the city’s cyber security industry came from the National Security Agency. The NSA already had 2,000 employees at its Texas Cryptology Center at Lackland but will create an estimated 1,500 more jobs at its large data center and campus at Loop 410 and Military Drive. San Antonio has the cheapest electricity in Texas, and the state has its own power grid, making it less vulnerable to power outages on the national grid. The NSA’s facility also gives them easy access to UTSA’s ICS-CIAS. ICS Founding Executive Director Ravi Sandhu says “recruiting is one end … but it’s an attractive thing for NSA employees [too]. They can further their education—they can do degrees part-time, they can do advanced degrees … so there are advantages beyond direct recruitment of NSA students.”

All of this led U.S. Representative Ciro Rodriguez (D-San Antonio) to declare San Antonio “the center of cyber security, in the country and the world.”

In 2008, Microsoft opened a $550 million, 477,000-square-foot data center in San Antonio. The data center in Texas is one of a network of massive facilities that Microsoft built to enable the software giant to begin offering cloud services. The facility hosts a number of Microsoft applications, including Hotmail,, and Windows Live Messenger.

Microsoft’s San Antonio data center employs a number of strategies to make it more manageable, scalable, and energy efficient. Ubiquitous sensors track information including temperature, CPU utilization, and humidity and report back to Microsoft’s internally developed data center management tool called Scry.

The facility receives a large supply of nuclear and wind energy. The massive building is about the size of 10 football fields; at the peak of construction it required 965 full-time employees to build it, and actually contains two identical side-by-side data center units. When it opened, the San Antonio facility was the most power-efficient data center in Microsoft’s network. The facility uses 602,000 gallons of recycled waste water a day for cooling during peak cooling months.

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