Study Shows US with Lion's Share of Data Center Market

Data centers are widely considered to be a global enterprise, with presence all over the planet as different uses for the systems are used in different places. Entertainment, high-end data mining, a host of other options all come into play. But a recent study from Synergy Research Group suggests that the data center market has two major dominating forces holding a majority of data centers between the two: specifically, the United States and China.

It's not surprising that the first and second largest economies on the face of the Earth would be accountable for the lion's share of data center operations, but the Synergy report makes it clear how the split actually fared. The United States accounts for most of that half, representing 44 percent of the major data centers for both cloud and Internet data center sites. China, meanwhile, rounds out the half at 10 percent, representing the second largest proportion of such sites. Australia chips in five percent, tying its mother country the U.K. at the same number as well as Japan and Singapore. Germany and the Netherlands each chip in four percent of sites; and the rest of the world falls into the “other” category at a hefty 18 percent.

Based on the analysis of 13 major firms in both cloud-based services and Internet services—including social networking giants, e-commerce firms and those that offer the various “as-a-service” options—the companies reportedly control around 150 major sites worldwide, with each holding an average of 11 sites total. Within the average, though, clear differences emerged; three companies, the leaders in hyperscale cloud—Microsoft,IBM and Amazon Web Services (AWS)—held at least 20 data centers each, and represented the broadest such footprint.

Synergy Research Group chief analyst and research director John Dinsdale offered up some comment regarding the study, saying “The country distribution of major data centers clearly reflects two things – the U.S. dominance of cloud and Internet technologies; and the scale and unique characteristics of the Chinese market. The ranking also reflects the relative importance of smaller countries that are often used as regional hubs – Hong Kong, Singapore, Netherlands and Ireland.”

Seeing the bulk of the data center market so squarely in United States hands might be a shock to some, but given the substantial number of major tech firms in the country, it may not be. With companies like eBay, Salesforce, Facebook and others—don't forget Google, Amazon and Microsoft—all running operations in the region, it's clear that plenty of high-end data center power will be needed to keep all of that aloft. Of course, knowing what we know about disaster preparedness and redundancy suggests it would likely be useful to keep operations in other regions as well. But by like token, there also may be security concerns involved, particularly when getting involved with China or the like.

As the importance of the data center market grows, knowing the geographical makeup of this market might be valuable. The world beyond the United States is starting to look like a potentially appealing niche market in the making when it comes to data center material, so we may well start seeing some big changes to come.

Apple plans 'major, major expansion' of Oregon data center

With a new tax law in hand, Apple is set for a "major, major expansion" of its Prineville data center, says Crook County's top administrator.


Gov. Kate Brown signed a bill last week that exempts Oregon data centers from a thorny tax that had threatened to add millions - or tens of millions - of dollars to the companies' annual property tax bill.

It was an unexpected issue for Facebook, Apple, Amazon and Google, which had each negotiated tax breaks for their server farms worth tens of millions of dollars annually, exempting their high-end computers from local property tax rates.

But a new state valuation methodology, upheld last fall by the state Supreme Court, could have undone those savings when data centers' 15-year tax breaks expired.

Amazon said that halted plans for several new data centers at its facility in Morrow County, and lawmakers said Apple had also iced its plans to add a second 338,000 "data hall" in Prineville and add a solar farm to offset its power use.

On a Tuesday broadcast of Oregon Public Broadcasting's "Think Out Loud" talk show, Judge Mike McCabe, Crook County's administrator, said Apple is ready to go ahead with at least some of its growth plans.

"They're planning on a major, major expansion," McCabe said. He indicated that negotiations on the details of that project remain under negotiation.

In a followup conversation, McCabe said he doesn't know specifically what the comapny has in mind.

"The haven't shared it with us," he said, "and we haven't seen the plans."

Apple did not respond to inquiries seeking confirmation.

The new tax law could set off a server farm building boom in Oregon.

Facebook operates three large data centers in Prineville and has said that, with the tax bill passed, it's also open to future expansion. But the company has given no timetable.

Data centers are not big employers - Facebook employs just 126 at its three large buildings in Prineville, for example. But they can have a large impact in small, rural communities. Crook County has just about 5,400 employees altogether and one of Oregon's highest unemployment rates, at 9.5 percent.

Despite their massive property tax breaks, the data centers are nonetheless major contributors to local government - a byproduct of the huge volumes of electricity they use to power and cool their computers.

Prineville forecasts that franchise fees generated by electricity used in Facebook and Apple data centers will fund more than a third of its $4 million budget this year.

An upgraded electrical substation in Crook County has created capacity for many additional data centers in Prineville. With the new tax law passed, and Mayor Betty Roppe said on OPB's show that she expects more will come.

"I want two more," she said. "I think that's doable."

Latest $600M Google Data Center Comes Online in Oregon

Google has formally opened its second data center in the Dalles, Oregon, twice as big as the Gooogle data center in the Columbia River Gorge community. The cost of the expansion is believed to be $600 million, according to The Oregonian (signup required).

The company’s astronomical data center investments indicate how fast its internet services continue to grow. Google announced the Oregon expansion in 2013.

Oregon was home to the first Google data center that was owned and operated by the company under its initiative to build its own energy-efficient infrastructure that kicked off in 2006. That project has been one of the data center industry’s most photographed facilities. Several projects from other big tech giants like Apple, Amazon, and Facebook followed, firmly placing the state on the data center map.

Last year Google did a “rip and replace” upgrade of the electrical infrastructure to boost its server capacity in Oregon.

Google paid $1.2 million to the city, Wasco County, and the local school district in a 2013 tax break deal ahead of the latest data center. Google will pay $800,000 annually following the initial payment. The approved package could save Google tens of millions over the deal’s 15-year lifespan.

Dubbed the Silicon Forest, the region features low-cost power, moderate climate, and good tax breaks for data center operators. The recent data center exemption from central assessment makes the region all the more attractive.

Google invests billions of dollars in data centers every year. The company went from slightly north of 100 servers 15 years ago, when it was founded, to spending about $5 billion per quarter on building and operating its data center infrastructure.

A recent report revealed that the level of infrastructure spending has led to some major funds cutting stake in the company.

Google is currently considering an expansion in Atlanta, where Douglas County officials recently approved a package of tax breaks for the potential project. Other recent data centers in the works include its first company-owned facility in the Netherlands and a reported $66 million project in Taiwan.

Other major expansions include but are not limited to: a $600 million expansion in Berkeley County, South Carolina; $390 million in new data center construction in St. Ghislain, Belgium; another $400 million in construction in its campus in Lenoir, North Carolina; $400 milllion in additional expansion spending in Council Bluffs, Iowa.

Earlier, Apple was reported to be resuming expansion in Prineville. Multi-tenant data center provider ViaWest announced it was building in Oregon in February. Oregon’s data center boom continues following a few months of stutter during the central assessment controversy.