Tuesday, February 10, 2009

Microsoft has announced the delay of Chicago and Dublin earlier this week (Microsoft will open Dublin and Chicago Data Centers as Customer Demand Warrants.  A few weeks ago the Des Moines data center delay was announced (http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D95T2TRG0).  Arne Josefsberg and Mike Manos announced these delays in there Building a Better Mousetrap, a.k.a. Optimizing for Maximum efficiency in an Economic Downturn blog posting.

 

This is a good, fiscally responsible decision given the current tough economic conditions.  It’s the right time to be slowing down infrastructure investments. But, what surprises me is the breadth of the spread between planned expansion and the currently expected Microsoft internal demand.  That’s at least surprising and bordering on amazing. Let’s look more closely. Chicago has been estimated to be in the 60MW range (30MW to 88MW for the half of the facility that is containerized): First Containerized Data Center Announcement.  Des Moines was announced to be a $500MW facility (http://www.datacenterknowledge.com/archives/2009/01/23/microsoft-postpones-iowa-data-center/). I’m assuming that  number is both infrastructure and IT equipment so , taking the servers out, would make it roughly a $200M investment.  That would make it a roughly 15MW critical load facility. Dublin was announced as a $500M facility as well (http://www.datacenterknowledge.com/archives/2007/05/16/microsoft-plans-500m-dublin-data-center/) so, using the same logic, it’ll be at or very near 15MW of critical load.

 

That means that a booming 90MW of facilities critical load have been delayed over the last 30 days. That is a prodigious difference between planned supply and realized demand.  I’ve long said that capacity planning was somewhere between a black art and pure voodoo and this is perhaps the best example I’ve seen so far.

 

We all knew that the tough economy was going to impact all aspects of the services world and the Microsoft announcement is a wake-up call for all of to stare hard at our planned infrastructure investments and capacity plans and make sure they are credible. I suspect we’re heading into another period like post-2000 when data center capacity is widely available and prices are excellent. Hats off to Mike and Arne from Microsoft for continuing to be open and sharing their decisions broadly. It’s good for the industry.

 

Across the board, we all need to be looking hard at our build-out schedules.

 

                                                                -jrh

 

James Hamilton, Amazon Web Services

1200, 12th Ave. S., Seattle, WA, 98144
W:+1(425)703-9972 | C:+1(206)910-4692 | H:+1(206)201-1859 |
james@amazon.com  

H:mvdirona.com | W:mvdirona.com/jrh/work  | blog:http://perspectives.mvdirona.com

 

Tuesday, February 10, 2009 6:47:31 AM (Pacific Standard Time, UTC-08:00)  #    Comments [4] - Trackback
Services
Tuesday, February 10, 2009 2:38:20 PM (Pacific Standard Time, UTC-08:00)
Why are you so surprised? Did Microsft announce dates for Des Moines or did they just say that they had bought land?
Where did the "30MW to 80MW for half of the facility that is containerized" come from? How does that relate to "Chicago has been estimated to be in the 60MW range "?

What if your assumption "that number is both infrastructure and IT equipment " is wrong and it is only infrastructure?
Then the size is even larger than you speculate.

Is it possible that Micrsoft has discovered the benefits of virtualization, now that they have their own Hyper-V? And therefore they don't need the capacity the thought they needed?

I do not agree that " capacity planning was somewhere between a black art and pure voodoo" It takes discipline, fiscal responsibility, and common sense.
I do agree with you final comment "Across the board, we all need to be looking hard at our build-out schedules"!
RabbleRouser
Wednesday, February 11, 2009 5:47:56 AM (Pacific Standard Time, UTC-08:00)
Yeah OK, as you pointed out RabbleRouser maybe "they discovered the benefits virtualization" and no longer need 90MW of power. But, before we jump to that conclusion, just as a data point, 90MW would power 450,000 servers at 200W each. That's would be an incredibly savings. Just incredible.

When the proposed explanation exceed the current fleet size, it needs more work. Its not virtualization.

James Hamilton
jrh@mvdirona.com

Wednesday, February 11, 2009 8:12:52 AM (Pacific Standard Time, UTC-08:00)
I went back and re-read the Microsoft blog:
"we will be able to delay the construction and opening of some of our facilities, which will save Microsoft and its shareholders significant operating expenses, going a long way towards meeting the goals that Microsoft announced this week. For instance we’re postponing construction of the data center in Iowa that we recently purchased land for. We are still continuing construction of our facilities in Chicago and Dublin, and are planning to open them as customer demand warrants. But given the current economic climate we’re going to do the right thing for our business and shareholders and revisit our plans on a quarter-by-quarter basis. "

Sounds like good fiscal responsibility. These Microsoft executives would never get elected to Congress! May be we should put them in charge of the so called "stimulus" bill!
RabbleRouser
Wednesday, February 11, 2009 8:52:21 AM (Pacific Standard Time, UTC-08:00)
Are you saying " Right on Microsoft for taking corrective action, but shame on you for getting into this situation in the first place?"
Just Asking
Comments are closed.

Disclaimer: The opinions expressed here are my own and do not necessarily represent those of current or past employers.

Archive
<February 2009>
SunMonTueWedThuFriSat
25262728293031
1234567
891011121314
15161718192021
22232425262728
1234567

Categories
This Blog
Member Login
All Content © 2014, James Hamilton
Theme created by Christoph De Baene / Modified 2007.10.28 by James Hamilton