From the Lab

Five Ways that Data Center Location Matters

The IT “cloud” draws attention away from the physical plant, but as with residential home buyers, enterprises looking at data centers have reason to pay attention to location. Instead of checking out schools and nearby attractions, however, IT managers are considering other location-related factors, such as: proximity, setting, power, economy and market trends.

Proximity – Whether planning to use a data center to host applications, conduct big-data analysis, provide disaster recovery or run other typical business applications, most enterprises have reason to count the miles between an external data center and their existing IT facilities. In disaster recovery, for instance, there is an obvious risk to being too close to the site being backed up. Yet there is also a downside to being too far away. If airports are closed or inaccessible, as they were following the 9/11 attacks, making a quick visit becomes impossible.

Setting – Data centers are found in a range of urban-to-rural settings. Traditional colocation sites, for instance, are often known by their downtown street address. Newer and larger facilities tend to be located outside of cities, with one trend being for purpose-built data centers to pop up in cornfields or other rural sites. There are pros and cons to each case. Web companies following a national (or international) strategy tend to be the ones siting their data centers in the middle of “nowhere,” but for others, the choice is largely between city and suburb, with proximity, security, size and infrastructure being related attributes.

Power grid – With data-center deals now typically being measured in Kilowatts as much as square footage, there is no escaping power. The base metric, however, only goes so far. Enterprises shopping for data center services want to know how much power is feeding a facility; but they also need to know the type and level of redundancy. A downtown facility (to continue with the previous point) is likely to be limited in the amount of backup it can offer because of space constraints. Given that data centers are not power companies, the ultimate question then becomes where on a preexisting power grid a data center is located.

Regional economy. This factor may be irrelevant for truly “cloud-based” services. But in most other enterprise use cases, the industries that drive a region are likely to impact data-center capabilities. Data centers in Northern Virginia (NoVa), for instance, are naturally attentive to the particular needs of government agencies. Data centers in the Northeast should likewise reflect the evolving requirements of finance, healthcare and life sciences, higher education and media.

Market trends. As was painfully learned by fiber-optic companies 15 years ago: If you build it, they may not come. The same applies to data centers. After all, they are part of the broader telecom infrastructure. A slow economy, however, may still lead to overhang – although local markets may vary. Real estate investment firm Jones Lang LaSalle (JLL), for instance, projected last year that in twelve North American data-center markets, buyers would have the upper hand in 73 percent of the subsequent five quarters. But the report forecast neutral markets (buyer-seller parity) in three metro areas for 3Q 2015: Northern NJ, NoVA and Seattle-Portland.

Location, location, location – that’s the residential real estate mantra. But it also matters when you’re looking for a data center. It’s a distinctive part of Keystone NAP, a power-rich advanced data center sited on nearly 10 acres, 65 miles south of New York City and 130 miles northeast of Washington, D.C.