Locating data centers in an energy-constrained world

1Executive Summary

Changes in the power market are rippling through the Internet industry, altering both the location of data centers and their sources of power.

Globally data centers are currently buying $30 billion of power per year. Consequently site selection depends on energy much more these days. Sustainable energy has special cogency to high-tech companies, in particular. Many of these firms also want a long- term fixed price for their electricity. This is possible only for power from renewable energies, because those alone avoid the two major pitfalls in conventional power: the unpredictable prices of fossil fuels and the added costs from future government policies imposed on fossil fuels. Altogether, Google, Facebook, Yahoo and others are aiming for roughly one-third of their power to come from renewable sources within two years approximately.

Picking a data center location, which, for this report, we call data-center siting, includes considerations beyond the geographic location: how to procure energy and green-energy models, all to run better on a new, ever-shifting energy infrastructure.

For an end user’s perspective, the only visible difference between having a data center “in your backyard” or on the other side of the world is latency. The cost to run a data center now varies significantly from site to site. Therefore, applications able to accept longer waits could benefit from the significantly lower costs by running on more- remote data centers. In the future, buying computational cycles through managed services could be through tiered pricing based on latency times too.

This report is intended for:

  • Data-center and infrastructure planners
  • Chief information officers
  • Business developers of fast-growing companies with high data and transaction volumes
  • Electricity-procurement managers
  • Economic-development, government officials seeking to attract new data centers

The following pages will help these decision makers weigh the most important parameters behind locating new data centers, whether in the U.S. or globally. Doing so will lead to more cost-effective, reliable and sustainable data centers.

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Relevant analyst in Amazon Web Services (AWS)
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