By the BF Staff
From the January/February 2017 Issue
According to the 2017 Data Center Outlook recently released by JLL, the new year is shaping up to be a good one for the data center industry, with demand continuing to surge and cloud computing playing a bigger role. Here are some highlights:
Last year, the data center market saw big deals from major players, new economic and regulatory policy, and the wild card that is strategic cloud adoption. These factors are changing the rules of the game—from pricing models to location selection tactics, and everything in between.
Over the next 12 months, JLL expects to see user demand for smart data center solutions continue to climb, while operators will feel the heat to deliver more data, faster and more flexibly than ever before. Here are the top five trends expected play out in 2017 in the data center sector:
- Bold M&A will disrupt the playing field—while raising barriers to entry for newcomers. Mergers and acquisitions in the data center sector surged in 2016, a trend that’s on pace to continue. As the experienced players become bigger, expect less room on the bench for new recruits.
- Shifting global policy and economic trends will spark important new questions about sovereignty and taxation. The U.S. data center climate will evolve over the next two years, with influence from the new presidential administration and federal mandates for optimization. Overseas, keep an eye on Brexit proceedings, operator tax breaks and the continued push for data sovereignty.
- Data still needs a home, but cloud adoption is shifting which data centers host it, and where. Expect to see even swifter movement to the cloud in the industry’s hub markets, including Silicon Valley and Northern Virginia. Already, some major cloud providers are anticipating they will need to triple infrastructure by 2020.
- Retail pricing may be on the way out as wholesale pricing becomes ubiquitous.
CHEYENNE, WY: ABUNDANT POWER
Abundant power, favorable population, exceptional fiber connectivity, cool climate and other surprising revelations about technology all in the “Cowboy State”—who knew?
Wyoming has always had the capacity to produce more power than it can consume, yet getting that power to the locations that need it can be problematic. That is just as true today with wind and solar projects coming on line as it was with the established fossil fuel sources. One solution is to “value add” to the resource within the state, and for electrical power, data centers do just that.
Today Cheyenne, Wyoming’s capital city, is home to a dramatically increasing data capability which supports cloud based computing, digital video delivery, and supercomputer based atmospheric and geocentric research. This growth is driven, in part, by access to power, unsurpassed fiber capacity and Cheyenne’s high dry climate.
At 6200 feet above sea level, Cheyenne is a thousand feet higher than Denver located 90 miles to the south. Cheyenne’s altitude, coupled with its semi-arid environment, has enabled data centers to build in a way that takes advantage of “free cooling” to a greater degree than is possible in most other locations.
And then there is fiber connectivity. Cheyenne sits astride an unparalleled convergence of regional and transcontinental fiber optic cables. Much of metro Denver’s digital traffic enters national backbones at Cheyenne and multiple national carriers have a point of presence in Cheyenne. Recently one provider, CenturyLink, stood up Terabyte capacity to serve Cheyenne’s growing datacenter demands.
Data centers also require electrical power. Fortunately for Wyoming in general, and Cheyenne specifically, that power is readily available and more is coming on line. The power provider for Cheyenne, Black Hills Energy, recently brought an additional 132 MW of natural gas fired generation on line with the capability to double that amount. Both Microsoft and Green House Data are taking advantage of wind-generated power from a 71 MW windfarm just west of Cheyenne.
Perhaps even more significant for the industry long term, Microsoft and Black Hills Energy have entered into an agreement where Microsoft’s back-up generation will be fired by natural gas, an abundant Wyoming resource, and operated by the power company as a peaking plant to level out the grid as more and more wind power comes on line. It is an innovative arrangement that has been done nowhere else and which has benefits for Black Hills Energy, its customers, and for Microsoft.
This is particularly important to Microsoft which has announced yet another expansion which will add to its current Cheyenne datacenter build which has been reported at over $750 million.
While Microsoft is the fastest expanding data center player in Cheyenne, it is certainly not alone. EchoStar Communications, Green House Data and the National Center for Atmospheric Research (NCAR) are all taking advantage of Cheyenne’s favorable climate, power and connectivity.
EchoStar operates one of the world’s largest and most advanced digital broadcast networks and has operated its primary uplink facility in Cheyenne since the early 1990’s. In 2011 EchoStar opened a 77,000-square-foot datacenter expansion anchoring its place as Cheyenne’s largest technology employer.
Green House Data celebrated the grand opening of its expansion in 2014. Their 35,000 square-foot, $35 million data center is four times bigger than its previous facility which was also located in Cheyenne. The new center is powered entirely by wind energy and has over 350 customers from around the world.
The NCAR Wyoming Supercomputer Center (NWSC) began operations in Cheyenne in 2012. The NWSC is a collaboration between NCAR and the University of Wyoming and is in the process of phasing out the supercomputer “Yellowstone” and bringing NCAR’s latest supercomputer “Cheyenne” online. Cheyenne will have a peak computation rate of over 3 billion calculations per second for every watt of power consumed. Cheyenne will be capable of more than 2.5 times the amount of scientific computing performed by Yellowstone which it is replacing. Since the supercomputing facility in Wyoming opened its doors in 2012, more than 2,200 scientists from more than 300 universities and federal labs have used its resources.
So there you have it, one of the world’s fastest supercomputers named Cheyenne doing basic research in Cheyenne; a state of the art uplink facility that manages a fleet of geo-synchronous satellites and broadcasts TV to all of North America; and a 200-acre datacenter campus inventing new ways to power the cloud. Now you know what can happen when climate, power and fiber come together in an innovative and prepared location.
SANTEE COOPER: WE DELIVER
Flip a switch and the light comes on. Plug in your computers and get plugged in. Turn on the water and it flows.
This is what Santee Cooper delivers, every day, across South Carolina. We also deliver the intangibles that people never see, such as leadership, environmental stewardship, and an economic environment attractive to new business. All of this builds a brighter South Carolina for us all.
Santee Cooper, one of the nation’s largest public power utilities, provides electricity to all 46 counties in South Carolina. For over 80 years, we’ve been breaking new ground by creating safe, reliable, energy-saving solutions that support our business community and ultimately improve the quality of life for South Carolinians. We power much of South Carolina directly and through 12 municipalities, all 20 of the state’s electric cooperatives, and we offer direct power delivery to Charleston Air Force Base and 26 large industrial customers.
Santee Cooper is a repeat winner of the American Public Power Association’s prestigious Diamond RP3 award for outstanding reliability, and our transmission system customers are only without power on average just a few minutes each year. Our constant focus on quality delivery and reliability is one of the many reasons we can offer the industrial electric costs that are up to 30 percent below the national average.
We also understand the importance of maximizing our natural resources and are proud of our record in renewable generation, energy efficiency, and environmental stewardship. We’ve been the state’s pacesetters when it comes to Green Power and renewable energy. Our recycling initiatives have earned industry accolades, and we’ve attracted national attention for our innovative program to recycle coal ash. Our comprehensive Reduce The Use campaign offers rebates, incentives, and low-interest financing to encourage customers to make energy-efficient improvements to their homes and businesses.
Our diverse generating portfolio combines natural gas, nuclear, coal, hydro and renewable resources. We’re partners with SCE&G in the ongoing expansion of V.C. Summer Nuclear Station. Nuclear power is virtually emissions-free and is an important asset as we work to meet coming emissions regulations. Nuclear is also reliable and offers low long-term operating costs.
In the data center and IT industry, we know there’s not a millisecond margin for interruption. That’s why South Carolina and Santee Cooper offer highly competitive advantages to power your business off the ground and into cyberspace success.
Google chose South Carolina for a data center in Goose Creek in 2007, and doubled the capacity of its facility in 2013. Now, South Carolina’s data center industry is projected to grow by 11 percent within the next five years—that’s faster than the national projected growth rate.
The state offers a number of advantages to the data center industry, such as:
- Financial incentives and tax credits. Specifically for data centers, the state has eliminated the sales tax on electricity for projects involving an investment of more than $50 million and 25 employees. The tax exemption also extends to computer-related purchases, such as servers and software.
- Access to an affordable workforce that includes a large number of former military members with critical technical and security skills.
- An impressive telecommunications network, complete with digital switching centers, copper and fiber-optic cable and redundancy. In addition, Intel has an R&D location in Columbia focused on developing new telecommunications services.
- Reliable and affordable electricity. Sources include hydroelectric, nuclear, coal and natural gas; rates average 11 percent below the national average.
- Efficient and comprehensive transportation infrastructure, including interstate/controlled four-lane access, mainline and short-line railroads, and commercial airports.
- Logistics consulting services, like Santee Cooper’s SPIEs (Site Preparation Industry Experts), who help choose a site that’s right for you.
- Low cost of doing business
In addition to the state, Santee Cooper offers economic development incentives, including a discounted industrial electric rate for qualified industrial customers.
Through Santee Cooper’s discounted industrial rate, eligible new or expanding industries can receive an initial, significant discount off the demand charge in your “firm” industrial rate. Industrial customers must meet minimum employment and capital investment requirements to qualify.
“Santee Cooper is committed to doing all we can to attract new industry and jobs to South Carolina, and to encourage existing industry to expand here,” said Lonnie Carter, president and CEO. “By offering this discount ourselves and through the state’s electric cooperatives and our municipal customers, we can help attract new jobs and industry to every corner of the state.”
Our creative and dynamic economic development team is actively engaged with our local and regional partners to attract new industry and stands ready to serve you throughout the site selection process.