Google: Stalled Data Centers Will Be Built

Google (GOOG) isn't abandoning the data center projects where it has slowed or halted construction due to the slowing economy, the company said this week. In a presentation at the Goldman Sachs Technology and Internet Conference in San Francisco, executives said Google intends to eventually complete a planned facility in Oklahoma, and that recent land purchases reflect long-term planning for an even larger data center network.

In October Google said it will delay construction of a $600 million data center campus in Pryor, Oklahoma that was originally scheduled to be completed in early 2009. The company also reportedly has halted construction work on a second data center building in Lenoir, North Carolina, where Google has already built and commissioned one data center.

"We will build those data centers," said Alan Eustance, Google's senior vice president for engineering. "There's no doubt that over the life of the company we will need that computation. None of those sites have been shelved."

"All the demand coming our way is relentless," added chief financial office Patrick Pichette. "It's not a question of if, it's a question of when."

"Lumpy" CapEx Spending
Securities analysts noted that the company's bottom line has benefitted from the slowing of capital expenditures on data centers in the past two quarters. Pichette said the company's investment in data centers was "lumpy" and influenced by many factors that fluctuate from quarter to quarter.

But the Google executives were clear on one point - the demand for its data center capacity will not slow. That expectation of long-term growth, along with the company's practice of building custom servers and routers, forces Google to work ahead.   

"I believe it's a huge advantage for us to have this computational infrastructure," said Eustance. "We're doing it in a different way in that we're actually trying to control every piece of the ecosystem, from where we put our data centers to the infrastructure inside the data center. We're using a lot of our own networking gear to do inter-cluster interconnects."

Buying Ahead of Demand
That approach requires additional planning, which is why the company has bought land in cities where it it not yet ready to start construction on new facilities. Google has purchased a 460-acre property in Blythewood, South Carolina for a potential data center, and recently bought land in Austria and Finland. 

"The lead times on some of this is actually very long," said Eustance. "It makes sense to do some land acquisition and data center acquisition in advance of actual needs. If you're building the while thing (yourself), you have to front load it."

Eustance said the delays may result in more efficient and powerful data centers. "Next year's machines will be a lot more powerful than this year's machine," he said.
"If we postpone (an equipment) purchase six months, we will have much more powerful machines in that data center."

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