Apple Adding Data Center in Silicon Valley

apple-clouds

The new data center will provide additional IT capacity at a time when Apple is rumored to be developing new cloud computing services delivering streaming media, which could include music, video and file storage. Apple has reportedly acquired the domain name iCloud.com for use with a new service.

Facility Ready in Third Quarter of 2011

In April, Apple signed a seven-year lease for 2.28 megawatts of critical power load in a new data center being built in Santa Clara, Calif. by DuPont Fabros Technology (DFT), a leading developer of wholesale data center space. The lease is scheduled to commence in the third quarter (July to September), when the building opens.

DuPont Fabros disclosed the Santa Clara lease in its first quarter earnings, but did not reveal the name of the tenant, which is consistent with its policies. In a conference call with analysts, company executives described the tenant as a "Fortune 50 technology company with excellent credit.” But multiple industry sources have since confirmed that the tenant is Apple.

The lease appears to be Apple's first investment in wholesale data center space. In the wholesale data center model, a tenant leases a dedicated, fully-built data center space. This approach is attractive for companies that need to deploy additional data center space quickly, as wholesale space can be delivered more rapidly than building a new data center.

Most wholesale leases are now priced in power capacity rather than square footage.  The Silicon Valley lease works out to about 11,000 square feet of data center space. By comparison, the  iDataCenter in Maiden, North Carolina is 500,000 square feet, and includes more than 184,000 square feet of data center space, according to records filed with local officials. (See the Apple Data Center FAQ for more on the Maiden facility).

Data Center Capacity on Both Coasts

As we’ve noted several times previously, it’s likely that Apple will need at least one other large data center complex to provide backup capabilities for the facility in North Carolina. Most major Internet companies have major hubs on both coasts, which helps with content delivery and also provides the ability to keep copies of critical data “out of region” so that a single natural disaster wouldn’t threaten the survival of the data.

The Santa Clara facility would provide Apple with additional capacity on the West Coast, where Apple also has existing data centers in Newark, Calif. and on its Cupertino headquarters campus.

Santa Clara is the data center capital of Silicon Valley because the local power company, Silicon Valley Power, offers slightly lower rates than those available from PG&E in surrounding towns. Data center service providers with facilities in Santa Clara include Digital Realty Trust, CoreSite Realty, Savvis, Vantage Data Centers, Equinix, Terremark, Server Farm Realty and QTS (Quality Technology), among others.

Landlord for Major Internet Players

The Santa Clara site is the first West coast facility for DuPont Fabros (DFT), which also has data centers in northern Virginia, Chicago and New Jersey. The company's tenants include Microsoft, Yahoo, Google and Facebook.

DFT's Santa Clara site will be built in two phases, each with 18.2 megawatts of capacity. When it is completed, the building will span 360,000 square feet, with a total of 176,000 square feet of space on a 42-inch raised floor, which allows cooling capacity for high-density server installations.

It's not clear whether Apple has any expansion options for additional space at the facility. But many of DuPont Fabros' largest tenants follow a pattern in which they lease space in the first phase of a data center, and later take additional space once the second phase is available.

Analysts at Jeffries & Co. are predicting that Apple will build additional data centers in the U.S. and Europe to support a global streaming video service to compete with Netflix and YouTube. Jeffries analyst cites expansion reports about Apple’s North Carolina facility and references third-party reports that "plans for data center builds in other parts of the U.S. and Europe are accelerating meaningfully."

What will the new data center capacity support? Stay tuned.

Want to know more about Apple's data centers? See the Apple Data Center FAQ or check out some of our previous coverage: