DataCenter.com
06-26-07
Google's Iowa data center smart move, experts say
By Bridget Botelho, News Writer
Google Inc.'s plan to develop at least two data centers in Iowa is a smart choice
for many reasons, data center site selection experts say.
Google's $600 million Iowa data center project is under construction on a 55-acre
site at the Council Bluffs Industrial Foundation's new business park and is
expected to open spring 2009. The two-building project includes the purchase of
an abandoned industrial building, which will be retrofitted to suit Google's needs.
The big question is why Council Buffs, Iowa, a town with a population of about
60,000? It just so happens that Iowa ranks in the top 10 most cost-effective
places to build a data center in the U.S., according to studies by location
consultants The Boyd Company, Inc., of Princeton, N.J. The ranking is based on
factors, such as land and power costs, availability of local workforce with data
security skills, airline service from national carriers, insulation from natural
disasters and quality of life.
Iowa has a lot to offer organizations building a new data center, said Drue
Reeves, vice president and research director at the Burton Group, an IT
consulting firm. Among Iowa's virtues are:
* Cheap land. Google Inc. bought 1,185 acres at this location and an option to
purchase several more acres south of Council Bluffs. It has plenty of room to
expand at a fraction of the cost of purchasing land in the San Francisco Bay
area.
* Plenty of reliable electricity.
* Relative safety from natural disasters. While it's true that there's a threat of
tornados and floods, Google's location is not in the 100-year flood plane and a
direct hit from a tornado is unlikely. Also, Council Bluffs is an unlikely terrorist
target.
* A large, college-educated population. Nearby Omaha, Neb., has a population
over of 400,000 and over 850,000 live in the greater metropolitan area, with
several universities.
When you combine these with tax incentives, Iowa makes perfect sense, Reeves
said.
Prairie lands, the Missouri River and Google
In addition to the land Google is building on now, it also invested in an extra
1,130 acres of land, giving the search engine company plenty of elbow room if it
ever decides to build additional facilities.
"Companies want to buy more land than they need -- buffer acreage -- for future
expansion and security reasons. Google bought more than 1,000 acres just in
extra space. You can only buy that much land in the Midwest," said John Boyd
Jr., a consultant with The Boyd Company.
As far as earthquakes, wildfires and hurricanes go, the only way Iowans see
these sorts of natural disasters is by searching Google for them. It stands to
reason that Google's facilities should be relatively safe, as well."There is no
perfect location in terms of natural disasters, but the area of Iowa Google is in is
pretty safe," Boyd said.
The new data center will staff about 200 employees, including experienced data
center managers and Linux administrators.
Google is likely to have a deep talent pool to choose from, thanks to the
Information Assurance Center at Iowa State University (ISU). The center is
certified by the National Security Administration (NSA) and offers master's
degrees in computer science, electrical and computer engineering, and
operations and management information systems. "These types [NSA-certified]
programs do drive where to build," Boyd said.
Potential employees will likely relocate to Iowa from out of state, as well. "If you
are a Google employee and have the opportunity to move Midwest and buy a
bigger house for less money than you could possibly buy on the East or West
Coasts, you would probably do that," Boyd said.
Generally speaking, Iowans are a relatively educated bunch. In 2006, about 90%
of Iowans graduated high school and about 25% of citizens had bachelor's
degrees -- an average figure, according to U.S. Census Bureau data.
Google's tax breaks
Iowa's tax system was recently revamped to lure in computer-related businesses.
The recently enacted statutory sales and property tax exemption for cooling
systems, power infrastructure, generators, electricity and other equipment
applies to companies, like Google, that invest at least $200 million in the state.
Google will benefit from a local property tax rebate through 2024. Despite any
rebates, Google will still pay about $65 million in real property taxes over the next
15 years, the equivalent of the property tax collected annually from 3,771
homeowners in Iowa. Google also will pay an estimated $6 million in sales taxes
in just the next two years from the purchase of building materials, hundreds of
thousands of dollars per year in electricity franchise fees and income, payroll and
other taxes when operating the facility.
Data centers a political hot button issue
Political leaders are getting hip to the idea that data centers are running out of
space, require large amounts of cheap electricity, need protection from disasters
and a large population pool from which to draw talent, Burton Group's Reeves
said.
"Pennsylvania is also positioning (itself) as an alternative disaster recovery site
for Wall Street companies," Reeves said. "Look for this trend to continue as 2008
political races begin to heat up. Gubernatorial, legislative and mayoral candidates
will undoubtedly use these data center wins as major selling points on political
agendas and position their states and municipalities as ideal data center
localities."
During late 2006, Google reportedly looked at a number of localities across the
Midwest, but would not disclose any specific sites or why they were dismissed.
"Many factors contributed to the decision, including the strong infrastructure and
the excellent team from Council Bluffs Industrial Foundation, the city of Council
Bluffs and the Iowa Department of Economic Development who worked with us
to make this possible," said Barry Schnitt, a Google spokesman.
Google energy
The electricity powering Google's Iowa data centers will come from MidAmerican
Energy Holdings Co. Primarily a coal burning energy provider, MidAmerican does
have a number of different generation sources on its grid, including renewable
energy, Schnitt said.
MidAmerican owns wind-powered electric generation sources and has 695.5
megawatts of wind energy facilities in operation, under construction and under
contract in Iowa. Also, pending approvals, MidAmerican Energy plans to add
another 540 MW of wind energy in Iowa, equivalent to removing emissions from
more than 682,000 vehicles, or 43%, of all the registered automobiles on the
road in Iowa.
Google has also set out its strategy to help build a cleaner energy future. Last
week, the company announced that it plans to be completely carbon neutral by
2008. "That's going to be tough, especially with this (Iowa) facility, since
MidAmerican burns coal," Reeves said.
Google recently announced another project in nearby Pryor, Okla. Schnitt said
Google is always looking for potential sites to host its infrastructure and expects
to make more announcements in the future.
Let us know what you think about the story; e-mail: Bridget Botelho, News Writer
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