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Saturday, January 30, 2010

FaceBook to Build it’s Own Data Center

Facebook to build its first data center, a 147,000-square-foot server farm to be located in Prineville, Ore. The social networking company didn’t disclose what it will cost to build, but according to public records dug up by The Bend Bulletin, the project would be valued at $188 million and employ 200 people during its 12-month construction before leveling out at 35 full-time employees.

By choosing Prineville, Facebook avoids paying about $2.8 million a year in taxes for 15 years, and can apply for other waivers as well. In addition, now Facebook has the cachet that comes with owning its own data center. And by spending a lot in up-front costs, it will be able to enjoy the benefits of a lower cost of ownership on whatever servers it places in the data center, thanks to the ability to control the entire environment. Over time, this saves Facebook money and could help it innovate to deliver a faster experience for end users.

Much like buying your own home rather than renting, becoming large enough to build your own data center is a big step in the life of a tech firm. However, Facebook could also be signaling that its wild growth over the last six years may be reaching a predictable and less torrid phase. It’s hard to commit to constructing a permanent data center if a company doesn’t know if it will need 50 or 500 new servers within the next year, but as growth becomes predictable it makes it easier to justify laying out the funds for permanent infrastructure and figuring out how much of that infrastructure the company needs. Sure a growing business could always add another data center, but building a single 100,000-square-foot data center costs far less than building two data centers of 50,000 square feet each.



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