What happens when they build these windowless concrete bunkers? In this article they mention MFNX's data center.
As you read the description of MFNX's data center remember the SUNW MFNX relationship and imagine them filled with racks of T3s filled with Q/A components. SUNW has a new storage facility in SC. Is it the same as the MFNX AboveNet II? MFNX says 18 more just like this one....
Data warehouses bring boon, burden
Tax revenue bonus to valley is offset by concrete emptiness of `server farms'
BY LAURA KURTZMAN
Mercury News
Silicon Valley has found the perfect neighbor for the Internet Age.
It's a big concrete building full of servers that yields copious amounts of property tax but very little traffic and has no kids to send to school.
Meet the co-location facility -- the very real and yet not-quite-there neighbor from cyberspace.
As companies from fledgling dot-coms to Fortune 500s stake their claim on the Web, they increasingly are turning to specialty firms to warehouse their equipment in concrete bunkers designed to withstand earthquakes, fires and terrorist attacks. The boom has created a new and highly profitable form of commercial real estate.
Blessed with ample fiber optic networks and close to the companies engineering the e-commerce revolution, San Jose and Santa Clara are at the center of the burgeoning market.
Last year, nearly 1 million square feet was built in Santa Clara County, said Jerry Inguagiato of CB Richard Ellis in San Jose. He expects that figure to at least double this year.
But the trend also comes with problems. The very thing that makes such buildings an attractive idea for a congested suburban R&D park -- a ghostly lack of employees and, therefore, traffic -- is problematic for a place like downtown San Jose, where planners are trying to attract a critical mass of people.
One developer has even proposed a high-rise near 160 W. Santa Clara St. devoted to nothing but warehousing servers, which store the data found on Web pages and run Web-based applications.
``We're concerned about allowing blank offices, especially high-rise offices, when the agency has put some money into revitalizing the downtown,'' said Jason Burton, the San Jose Redevelopment Agency planner for downtown development.
The redevelopment agency allowed AboveNet to build an Internet data center at the defunct retail Pavilion on North First Street, which failed for lack of customers.
The new 123,000-square-foot facility, which sold out even before it opened, is next door to the company's first location at 50 W. San Fernando St.
Dave Rand, the company's chief technical officer, said he chose the spot because it was right on the fiber optic lines laid beneath San Fernando Street.
Those lines are drawing other ``server farms'' downtown as well, because it allows their tenants to choose from a number of providers as they race to get enough bandwidth to accommodate the ever-growing amount of data flowing over the Net.
More downtown deals are in the works, including the proposed 12-story tower. From the outside, it will look like an office building. But inside, the Texas-based developer, the Archon Group, is proposing wall-to-wall cages stuffed with equipment -- and a generator on every floor. The city is asking that the generators be moved to the upper floors, so their roar won't be heard from the street when they're fired up.
High rent charged
Brokers say downtown landlords are charging as much as $6.50 a month per square foot to companies building data centers, rivaling the most expensive downtown rents.
``It's as good or better than an office building,'' said developer Kimball Small, who rented space to AboveNet when it was just a start-up and now sits on the company's board of directors. Small, who went through hard times when several ventures including the Pavilion and Santa Clara's TechMart failed, has been reborn as a developer of data centers.
Burton said the city has few options to limit the market, which is serving not only Internet firms but also telecommunications companies that need to house their switches and link up with one another.
The Archon project fits into the city's office zoning category -- since most office buildings have computer rooms -- and cannot be denied.
The most the city can do is require the developer to put in enough parking and other amenities so the building can be converted to an office tower if the market dries up.
Until recently, most server farms were in converted warehouses and industrial buildings.
Developers reaped huge profits, often with buildings that looked as if they weren't good for much more than self-storage. Old warehouses were obvious candidates, because they were built to withstand heavy loads and are located along railroad lines where fiber optic cables are.
One developer leased a warehouse from the San Jose Unified School District on Stockton Street for 50 cents a square foot, fixed it up and leased it out as a server farm for $3 a square foot. The rent was stunning to brokers who until last fall couldn't find warehouse tenants, because so many industrial firms have left Silicon Valley.
``People say we don't have a warehousing need here anymore,'' said Tennessee Harris, a broker with CB Richard Ellis in San Jose. ``I say, yeah, we do. We have a warehousing need for data.''
Other companies, like Santa Clara's Exodus, moved into light industrial buildings. It was a good match, because just like a data center, those buildings originally had few employees and not much parking.
Unlike San Jose, Santa Clara has grown to love its newest industry, and low traffic isn't the only reason. Server farms also generate more tax revenue than a typical office building, because they contain billions of dollars of equipment, which is taxed by the county, along with the property.
The buildings also use 10 to 20 times as much electricity as an office building, a boon to the city's electric utility, especially as it heads into the uncertainty of deregulation.
``Other than electricity, there's relatively little services that are required, because there are very few employees,'' said Santa Clara Planning Director Geof Goodfellow.
If this new business is profitable to landlords and cities, it appears to be even more so to firms like Exodus. The company refuses to give per square footage charges but says it collects on average $220,000 a year from each customer.
Tenants are paying for the security of knowing their servers are protected from power failures, sabotage and leaky roofs, the bane of electronics equipment.
In addition to being waterproof, the buildings have been retrofitted to hospital seismic standards. A generator with 20,000 gallons of diesel fuel sits outside in case of an outage.
As for security,>b> getting into one of Exodus' facilities is a true sci-fi experience. A visitor first must get past the security guards seated behind bulletproof glass who check a list provided by tenants.
Security measures
Next comes the hand scanner. It reads the top of a visitor's hand and checks for a pulse, then matches the reading to the visitor's key card. This is to keep someone from getting in with a stolen key card -- or a dead person's hand.<i.Yikes!!
Once inside, the visitor enters the ``man trap,'' a short hallway with another hand scanner and key card reader at the other end. Guards can lock the doors to isolate an intruder.
But that's not all. The walls have been reinforced with Kevlar and the doors are bulletproof.
Inside, a massive air conditioning system pumps out heat from thousands of servers, creating the occasional windy spot but keeping temperatures at 68 to 72 degrees.
When the company started, a single cage of 56 square feet was considered a huge amount of space to rent. Now, big companies like Inktomi and eBay are renting 2,500 to 10,000 square feet. And Exodus, which started out with 25,000-square-foot facilities, is building new ones as large as 300,000.
How long this boom can last is anyone's guess. In the short term, data centers will keep springing up as the Internet pipeline widens, allowing more information to pass through and requiring more space to store the data.
``Over the next few years, Internet traffic will continue to flourish,'' said Rand, the chief technology officer for Metromedia Fiber Network, which bought AboveNet. Last year, he said, Internet traffic over his company's network to Europe increased sixfold. ``Once people get a taste of high-speed communications, they never want to go back.''
But others worry the phenomenon could die just as quickly as it arrived, leaving landlords and cities in the lurch.
Les Pelio, a developer who has built several Internet data centers from scratch in Santa Clara, said he wonders what he'd do with his windowless concrete bunkers if the market suddenly changed.
``It would cost us money,'' he said. ``We'd turn it into a warehouse. These buildings are so strong, you can store stuff on the second floor.''
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Contact Laura Kurtzman at lkurtzman@sjmercury.com or (408) 343-4524. |
