Episode 22: Ruralization - IT Farms

We all have heard about globalization. While not always popular topic in here in the US, it is clearly an established trend. I believe that all major companies need to think globally in every respect these days but that is a topic for another time.

In this episode I want to introduce the topic of “Ruralization.” I define this as the cost-optimized placement of a data center. The name pre-fetches an answer of course but that’s what names do.

The fact is today’s data centers evolved around metrics that no longer exist. Ten years ago, I would characterize the data center attributes as: 

• HW cost = same cost as Gold by weight
• Service/Support Skills needed = Training could be like getting a medical degree
• SW Programmer “Interaction” with HW = we all sat in the lab so we could      constantly push the init button….
• Overall potential for remote management = non-existent
• Power cost = Who cares
• Facilities cost = with the other issues, it was just a cost of doing business
• Long distance Bandwidth costs = High (if even feasible)
• Long distance “Interaction” (latency) = Impossible

Note I used a highly technical analysis here… 

At the time, companies made the right choice and did the only thing they could do which was co-locate their data centers with their users and their programmers – even if it meant buying AAA space in downtown NYC. For the most part, that is where we stand today.

Now let’s take a look at those same parameters above in a today’s economy using today’s latest technologies. It now looks like this: 

• HW cost = Thought that stuff just came free with the software…
• Service/Support Skills needed = One word - easy
• SW Programmer “Interaction” with HW = probably never have seen it….
• Overall potential for remote management = could be managed by bother-in law in Antarctica
• Power cost = Woa – my last utility bill was higher than my first mortgage!
• Facilities cost = Donald Trump is driving the cost trough the roof.
• Long distance Bandwidth costs = We’ve got enough buried fiber for us all to      watch our own IPTV channel.
• Long distance “Interaction” (latency) = Childs play

What’s changed?- EVERYTHING. 

The really big guys (e.g. Microsoft, Google) have figured this out and are now building their newest datacenters in rural locations, often even near power plants. The economics are compelling.

This is not going to stop here. I believe that Ruralization will not be limited to a few big players but, more and more, companies will seek out new datacenter locations based on these new cost dynamics.  

I believe the datacenters of the future will be located based on this new economy and, if you want to “see the Hardware” you better plan to stay at the Motel 6 in a small town in North Dakota. Actually, to me, Iceland looks pretty attractive. Geothermal power, good trunk links to Europe and the US, and is it so cold you could just open the windows for air conditioning!

Mark…