Mega DataCenter by Microsoft : Living in the Web…

Microsoft, Dublin

Seattle In the middle of a scrubby business park on the outskirts of Dublin, a hulking grey building has recently sprung up. It is protected by high, spiked railings and two sets of steel security barriers that are thick enough to stop a tank. There is no name above the door, but this 303,000 square foot industrial building is Microsoft’s new mega data centre, its first large-scale computing facility in Europe, representing an investment of $500 million.

Inside, thousands of servers wink small lights and hum in orderly rows in the dark, cavernous cool of the building, serviced by 30 or so human attendants. The football pitch-sized server halls, high ceilings and lifts big enough for a forklift truck are not sized for people. This is a cathedral to machines.

As Microsoft likes to put it, the internet — at least in part — lives here. Some 250 of the company’s web-based services, including the Bing search engine, Hotmail and MSN Messenger, are run from the facility.

Microsoft Data Center

Perhaps more significant, Microsoft is now running Azure, its recently unveiled “cloud computing” platform, from the Dublin facility. Cloud computing has become the umbrella term for the provision of computing power to customers over the internet from a remote data centre. The idea is that companies, including Google and Amazon, will rent computer capacity and storage to customers over the internet for a few cents an hour.

Facilities such as the Dublin centre are springing up all over the world but, for competitive and security reasons, the companies building them are secretive about where they are being built and have only revealed partial lists of their locations. In addition to Dublin, Microsoft has admitted to having facilities in Chicago, San Antonio and Quincy, Washington. The company is thought to be adding 10,000 servers a month to its arsenal.

Google is estimated to have about three dozen data centres, while Amazon is known to have facilities in various US states, as well as in Dublin, Frankfurt, London, Hong Kong and Tokyo.

According to analysts at Tier1 Research, the global internet infrastructure market is expected to be worth $29.8 billion in 2009, rising to $50.5 billion in 2012.

“There is a $30 billion opportunity in the cloud,” says Jean-Philippe Courtois, president of Microsoft International. “A lot of small businesses will adopt this, consumers are doing it already. With big enterprises we will see a hybrid scenario where a lot of companies will want some applications to remain physically on their sites.”

Having Microsoft, Google or Amazon host corporate data can be a cheaper way for companies to harness computing power. Small start-up companies, for example, do not have to invest in their servers but just pay as they go. Big companies, such as Nokia and GlaxoSmithKline, are already using this to cut the cost of providing services such as e-mail to thousands of employees.

Crucial Features

Energy-saving features are crucial, as concerns grow in Europe about the carbon impact of data centres. “Carbon caps and climate change are really starting to impact on the shape of the cloud,” said Mike Manos, who leads construction at Digital Realty Trust, a company that builds and runs data centres.

Legal requirements also play their part. Under European law, some types of information, such as customer credit card details, cannot be transported beyond the European Union’s borders. Thus, cloud computing companies need data centres in places such as Dublin to keep these data for their European clients.

“It is something governments are very nervous about,” says Dan Scarfe, chief executive at Dot Net Solutions, which provides tools to help companies develop software.

Then there is the issue of tax. The era of internet commerce has already allowed companies to locate their operations in tax-friendly regimes.

Many online gambling sites, for example, base their data centres in Gib-raltar to take advantage of its 1 per cent gambling tax, while internet retailers such as HMV and Play.com run operations from the Channel Islands so they can sell goods without value-added tax.

As companies have more and more operations hosted in remote data centres, they could take advantage of different tax regimes, says Manos.

“There is already a trend called ‘follow the moon’, where developers write applications that will move from data centre to data centre, depending on where the power costs are the cheapest, usually at night,” he says. “The same concept could be used for taxation, with applications migrating to the area of lowest tax.”

It is currently understood that digital transactions are taxed in the jurisdiction where the servers are located, says Tracy Neighbors, tax expert at Microsoft. Companies using the Dublin data centre, therefore, should be able to benefit from Ireland’s relatively low tax rates. However, he admits that applying tax laws to e-commerce is still a somewhat “fuzzy” area.

Moreover, choosing a base relies on a number of considerations. “We have 35 different criteria when deciding on the location of a data centre. Tax is one of them,” says Courtois.

In the meantime, data centre companies are mainly gearing up for huge expansion. There is room at the Dublin site to at least double the size of the Microsoft centre.

Behind the building, green fields fan out as far as the eye can see. Once these might have been for cabbages or flax, but now they wait to see if rows of computers will be sown here instead.

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