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 Feature Industry Articles 
Tuesday, January 07 2020
Increasing the Economy by an Average of $32.5 Million Per Data Center

A data center is a secure facility that hosts a multitude of servers, routers, switches, and other computing equipment used in high volume data storage and processing. Data centers are the heart of today's online services including apps, emails, streaming, online shopping, banking and much more. Data centers are providing highly reliable and secure cloud hosting solutions 24 hours per day, seven days a week and 365 days a year - simultaneously to thousands of global customers and should be designed with the highest uptime and efficiency possible. Data centers help their customers maximize availability, performance and security as well as comply with strict security and compliance requirements. Located in highly secure, not easily visible or accessible locations, data centers are a critical part of our society, business and the world.

As the consumption and the creation of data multiplies at exponential rates, so does the demand for data centers and colocation facilities. These data centers provide critical network connectivity points, provide hosting services for private and public cloud options, or host variations of enterprise data.

Some would argue that as a result of this current “outsource” swing in the market place, additional data centers are being added to accommodate the growth in colocation and cloud options. Others see shift in the market place as network demands are forcing our data to be close to the end-user, calling for the growth of new “edge” data centers. The various demands and growth of IoT (Internet of Things), data availability, data storage, data processing, etc., is pushing the consumption of data center space. As a result, we see new data centers being required as the commodity of “data” becomes more valuable than the commodity of oil.

However, data centers can’t just be built anywhere. It requires proper site selection to ensure reliable operations and profitability. Like any building project, data center site selection is a complex process of economical and geographical considerations as well as weighing needs against risks factors to find the best location. Selection should also account for factors such as connectivity and proximity. In each category, use long and short-term goals to determine what can be “given up” in order to balance a “need” or requirement. It is a delicate balance of maximizing connectivity and mitigating as much risk as possible.1

Infrastructure and Connectivity
Location, location, location have always been the three essentials in any site selection process.  This still applies, however, with data centers the focus is on power, fiber connectivity, and water availability.

Connectivity and energy is the life blood to data center operations and only one source is not sufficient.  Data centers require redundancy and continuity as they never sleep and must always be ready to respond to the needs of customers communicating around the clock.

The general public takes data centers for granted and is unaware of their importance and significance in pour daily lives. Every phone call, Internet connection, email, tweet, app, video or GPS happens at the speed of light within data centers located across the globe. The multiple Fiber optics telephone carriers such as AT&T, VERIZON, Level 3, CenturyLink, Sprint and others work in tandem inside data centers to divert the packets of information to their destinations.  Diverse routes into the data centers insure re-routing of the data traffic if an outage occurs in one of the lines.  The more carriers with fiber optics in the community and the facility the better.

The two important elements of connectivity are bandwidth and latency.  Bandwidth, measured in bits, kilo-bits, or megabits per second is the rate data flows over the carrier’s network.  The higher the bandwidth the more information that can pass through the network. Latency, measured in milliseconds is the time is takes for the information to reach its destination once it is requested.  Low latency gives a network a low speed sometimes experienced with buffering.  This might be acceptable for some non-critical applications, however, more and more firms require extremely low latency for their operations, especially with financial services firms and hi-frequency traders, which is why many of these firms have located in northern New Jersey or comparable suburban locales situated within large metros (e.g., Boston, Chicago, Atlanta, Dallas, Los Angeles, and San Francisco).  
Power to the facility is arguably the second most important factor for data centers as connectivity without power doesn't get you very far.  Similar to mission critical facilities like hospitals, data centers often seek dual power feeds to the facility, ideally from separate and diverse substations.  If power is lost from one electric line feeding the building, switchgear on site quickly transfers the load to the other substation. Recognizing that sometimes both feeds can go down in severe storms or natural disasters, on site energy is produced by back up diesel or natural gas generators that can run for days or weeks until power is restored by the utility company.

The third important factor for data center operations is an adequate water supply for cooling purposes to keep IT and electronic equipment in the data center operating in acceptable temperature ranges of approximately 65 to 72 degrees.  If there is an ability to use free cooling from the atmosphere the amount of water required is significantly reduced, compared to what would be needed in warmer climates. Since cooling and energy is such as significant component of the operating expense of a data center, more and more firms are seeking locations in cooler climates around the globe.  Apple benefited in Nevada from its underground water supply while others have their sights set on Iceland and Finland as a result of their low cost, sustainable geothermal and hydroelectric energy sources.

U.S. Chamber Report: Data Centers Average $32.5 Million in Economic Impact
According to a new report released by the U.S. Chamber Technology Engagement Center (C_TEC), the average data center adds $32.5 million in economic activity to its local community each year. The report, Data Centers – Jobs and Opportunities in Communities Nationwide, also reveals that during construction, a typical data center generates an additional $9.9 million in revenue for state and local governments.

“Innovation drives our economy, and data centers drive innovation. When communities support data centers, those data centers in turn create jobs, improve local public infrastructure, and encourage skills training for workers and businesses,” said Tim Day, senior vice president of C_TEC. “With the right policies in place, data centers can serve as an important source of economic growth.”

The report shows that during construction, data centers on average employ 1,688 local workers, provide $77.7 million in wages for those workers, produce $243.5 million in output along the local economy’s supply chain, and generate $9.9 million in revenue for state and local governments.

Additionally, during its yearly operation, a typical large data center supports another 157 local jobs and $7.8 million in wages at the data center and along the supply chain. Each year, data centers generate $32.5 million in economic activity within local communities. In addition to property and sales taxes paid directly by the data center, local governments receive an additional $1.1 million per year in individual income and sales taxes.

According to the U.S. Department of Energy, there are three million data centers in the U.S. and more than 90 percent of the servers are housed in small- and medium-size businesses or multi tenant data centers.

The report was released during an event featuring a panel discussion with technology industry leaders. Panelists included RagingWire Data Centers Vice President of Marketing Jim Leach, Pepco Holdings Vice President of Technical Services Miguel Ortega, Measure Director of Data Engineering KC Love, and Credit Junction Chief Strategy Officer Sergio Rodriguera, Jr.

C_TEC was established to advance technology’s role in the U.S. economy. Our members are excited about the future of technology to drive growth, jobs, and life-changing advances in transportation, medicine, consumer experiences, and business operations. C_TEC promotes policies that foster innovation and creativity and sponsors research to inform policymakers and the public.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than three million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.2

1 Tim Kittila, Director, Data Center Strategy, Parallel Technologies


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