Google Data Centers: $3,000 A Square Foot?

Google appears to be spending nearly $3,000 a square foot on its new data center project in North Carolina, about three times the going rate for developing most premium data center space. Google's investment exceeds that of the largest data center developers, who typically spend about $1,000 per square foot on their facilities.

The heavy investment reinforces the importance of Google's data centers in the company's ambitions. The Google data centers serve as the platform for the company's web-based services and advertising products. Google (GOOG) sees its data centers as its business edge, and is seeking to extend its competitive advantage with an extraordinary level of investment.

An in-depth analysis of Google's data center spending hasn't been possible until now, as the company doesn't disclose the square footage of individual facilities. This is part of a broader strategy of secrecy about Google's data center operations, which has stoked speculation about the scope of the facilities and the equipment inside them. But a Sept. 21 article in the Raleigh News & Observer reported that Google's recently completed data center building in Lenoir, N.C. is 100,000 square feet. Separate reports indicate Google data centers in other locations are of a similar size (more on this in a moment).

Google spokesman Barry Schnitt wouldn't confirm or deny the News & Observer report, consistent with the company's practice. "I looked into the 100k square foot stat and I'm not sure where that came from," Schnitt wrote in an email. "We generally do not provide dimensions for our facilities."

Schnitt confirmed that the $600 million spending figure for each of the four projects announced in 2007 (including the Lenoir project) includes the cost of two data center buildings. "The $600 million does not include operations cost," Schnitt wrote. "It is strictly capital investment (construction, infrastructure, computers, etc.)."

At $300 million per data center, Google would be spending approximately $3,000 per square foot on a 100,000 square foot data center building. By comparison, developer DuPont Fabros Technology (DFT) said this month that it spent $1,000 a square foot to develop a premium data center in northern Virginia that hosts Yahoo (YHOO) and Facebook. The largest data center landlord, Digital Realty Trust (DLR), spends between $500 and $1,000 a foot on its turn-key data center space.

Microsoft Data Center Spending
What about Microsoft (MSFT)? Last week it announced that it would spend $500 million to build a 550,000 square foot data center in Northlake, Ill. That works out to about $909 a square foot.

It's important to note that evaluating data centers involves apples-to-oranges comparisons, as costs are affected by regional pricing, the specifics of each data center, and whether the facility is designed for a single tenant or multiple tenants. Google's costs, for example, would likely include its IT equipment within the building, a cost borne by tenants rather than developers in multi-tenant facilties. In addition, some of the Google infrastructure in Lenoir (such as an electric utility substation) will be shared by the two Google buildings. Even when viewed as a broad estimate, the math suggests Google is investing much more in each facility than other data center builders.

What could account for this high price tag? The likely answer is server density. Google's data center infrastructure is essentially a huge grid of clustered commodity web servers, custom-built by Google and running on Google-ized versions of open source operating systems and Web server software. There are many estimates of the number of servers supporting Google's enormous operations, ranging from 450,000 servers to a high of more than one million.

High-density data center installations require more intensive investment in infrastructure to provide adequate power and cooling for tightly-packed servers. That means more power equipment (power distribution units, UPSes and generators) and cooling infrastructure (including chillers, water towers, CRAC units and often in-row cooling).

Power and Data Center Site Location
The high-density nature of Google's facilities centers is reflected in its data center site location strategy, which has focused on the availability and price of electric power, and access to nearby bodies of water for use in cooling towers. Google has acknowledged five data center construction projects since mid-2006: in The Dalles, Oregon; Lenoir; Goose Creek, South Carolina; Pryor, Oklahoma; and Council Bluffs, Iowa.

Are Google data centers in other sites also in the 100,000 square foot range? Recently storage columnist Robin Harris said he had used aerial and satellite photos and mapping software to determine that the two data center buildings at the Google complex in The Dalles were each approximately 100,000 square feet.

Data center operators building multiple new facilities will typically standardize aspects of their plans. Google's Schnitt says that although Google data centers "potentially" could all be a similar size, they are not cookie-cutter designs, either. Google is constantly updating its data center design and equipment to take advantage of the latest technological advances and efficiencies, according to Schnitt.