Oklahoma becomes a data-center leader

[GBCW 397]

By Gail Dutton - Tech Page One

Sep 17 2014

Throughout much of its history, Oklahoma has had a reputation for having two things more than most other states: oil and cattle. Now, the state is also becoming known for its data centers, with more than 70 global companies — including AT&T,Google, Hertz, Hyatt Hotels and Avis Budget Group — building data centers there.

To be sure, other Midwest and Great Plains states have been attracting data centers lately, too, but “Oklahoma is on the leading edge of that trend,” said Amy Fleischer, Ph.D., director of the NovaTherm Laboratory at Villanova University, whose researchers have studied data-centers operations.

The reasons have as much to do with the state’s business-friendly policies as the availability of low-cost energy, land and high-tech workers.

“In 2001 we started enacting policies to attract companies,” said Larry Parman, the Oklahoma Department of Commerce Secretary. “One of the biggest surprises for companies coming into Oklahoma is that we are fiscally disciplined.”

Those policies included passing a right-to-work law in 2001, tort reform in 2009 and workers’ compensation reforms in 2014.

In addition, Oklahoma, along with about a dozen other states, offers tax refunds for IT equipment as well as other inducements.

“When you’re spending millions of dollars and weigh the 9.25 percent sales tax in Chicago, for instance, against no sales tax for IT equipment in another state, the savings quickly add up,” said Andy Cvengros, vice president of data center practice at Jones Lang LaSalle, a commercial real-estate strategy and services provider.

The continued availability of technically skilled workers also is a priority.

Oklahoma, known for graduating petroleum engineers, has increased its support for education in science, technology, engineering and mathematics.

“Oklahoma has a well-educated, high-tech workforce,” Fleischer said.

The state has also benefited from the migration of college-educated people from New York, Chicago, Los Angeles and other major U.S. cities. In fact, according to U.S. Census Bureau data, Oklahoma City ranked 21st among U.S. metropolitan areas with a net migration of more than 1 million people with college degrees from 2007 to 2011 — more than each of the metro areas of Baltimore, New Orleans and Salt Lake City.

For those people who came and stayed, the state’s low income-tax rate is attractive.

“The state income tax’s top rate currently is 5 percent and may be down to 4.85 percent soon, depending on state revenue,” Parman said.

IT workers in Oklahoma also benefit from salaries that are 25 percent to 40 percent above the state average, and a cost of living that is 90 percent of the national average.

“That combination creates a huge wealth effect that lets people buy homes and have a better lifestyle,” Parman said.

Sitting atop huge reserves of oil and gas, and with strong, steady winds and plentiful water, “Oklahoma has one of the cheapest electricity rates in the nation,” Fleischer said. “That’s a huge incentive.”

The state’s industrial per-kilowatt-hour rate is 5.46 cents, 20 percent lower than the national average of 6.82 cents.

Oklahoma’s diversified energy portfolio is also a benefit to data centers trying to limit their carbon footprints.

“Sixteen percent of our energy is produced by wind,” Parman said.

With wind farms capable of generating 3,134 megawatts of energy, the state ranks sixth nationally in terms of installed capacity, and ninth for wind resources. Additionally, Oklahoma is a leader in converting its power plants from coal to natural gas, which, as the fourth-highest gas-producing state, it has in abundance.

Furthermore, with generally mild winters, adiabatic cooling is viable much of the year, Fleischer said. Since nearly half of data centers’ electricity is used for cooling, free cooling can lower operational costs dramatically.

For data centers that rely on water for chilling, the state has many aquifers, including the Great Plaines Aquifer (one of the world’s largest) and numerous rivers that crosscut the state, Parman said.

Natural resources aside, “high-speed data transmission and a high-quality electrical infrastructure” are two additional determinants in deciding where to locate data centers, Cvengros said. Which is why the Oklahoma Broadband Initiative was responsible for laying more than 1,000 miles of fiber optic cable in 2013 as part of its mission to provide broadband throughout the state.

Prairie states like Oklahoma have some compelling benefits, but they’re not right for all companies. For instance, Wall Street firms, whose transactions can be affected by a millisecond of latency, plan to keep their data centers close to stock exchanges.

http://techpageone.dell.com/technology/oklahoma-becomes-a-data-center-leader/

[GandD 5,966]

I wonder if they struggle recruiting people to relocate. It's like pulling teeth trying to get them big city folks with their big city degrees to move to the farm ya know?

[GBCW 397]

I wonder if they struggle recruiting people to relocate. It's like pulling teeth trying to get them big city folks with their big city degrees to move to the farm ya know?

I can imagine. I work for a company based in suburban New Jersey and the recent trend has been for all the best IT talent to work in NYC or the Jersey coast across the river from NYC. None of them want to even drive out 45 minutes into the suburbs for an interview, much less work here. The only people we can get who are even remotely interested are people who are somewhat desperate (so low quality).

[GandD 5,966]

I can imagine. I work for a company based in suburban New Jersey and the recent trend has been for all the best IT talent to work in NYC or the Jersey coast across the river from NYC. None of them want to even drive out 45 minutes into the suburbs for an interview, much less work here. The only people we can get who are even remotely interested are people who are somewhat desperate (so low quality).

Yeah, I'm reminded of the article (I think you posted it) talking about how a lot of tech companies are abandoning the sprawling suburban campuses for the inner city to attract more young talent. Then I think of the infrastructure put in place in California by private companies to bus workers out to the suburbs.

[GBCW 397]

The new housing trend around here is dense, multi-use housing developments near transit hubs. And if it isn't near, there's a bus that takes residents back and forth at no additional cost.

It's starting to become all about the city again. The suburban anomaly is almost over.

[GandD 5,966]

The new housing trend around here is dense, multi-use housing developments near transit hubs. And if it isn't near, there's a bus that takes residents back and forth at no additional cost.

It's starting to become all about the city again. The suburban anomaly is almost over.

It certainly does seem that way. If the US could put in play the kind of city planning that built today's Hong Kong, we could change everything. But we won't cus we suck at stuff and no one wants to do anything that takes more than three seconds of thought.

[GBCW 397]

It certainly does seem that way. If the US could put in play the kind of city planning that built today's Hong Kong, we could change everything. But we won't cus we suck at stuff and no one wants to do anything that takes more than three seconds of thought.

America has a ton of space, though. We're not Hong Kong. We don't have Hong Kong's constraints.

America is going to have to figure out how to populate a large nation while making good use of all the space without spending too much in gasoline dollars.

[Rob L 3,811]

Regard relocation:

Running a up to date data center is not labor intensive. Modern facilities run "dark" with no human intervention. Additional computing capacity is usually "containerized" meaning that when additional computers and rack space are needed, a new shipping container is brought in completely configured with air conditioning and external plugs for network and power.

The factors that drive data center location 1. cheap electricity 2. cheap flat land 1. Government Subsidies/ tax breaks

Computing in the cloud is a commodity: Microsoft, Amazon, Google, VMware are in a race to deliver the lowest cost computing with the greatest flexibility

[GBCW 397]

Regard relocation:

Running a up to date data center is not labor intensive. Modern facilities run "dark" with no human intervention. Additional computing capacity is usually "containerized" meaning that when additional computers and rack space are needed, a new shipping container is brought in completely configured with air conditioning and external plugs for network and power.

The factors that drive data center location 1. cheap electricity 2. cheap flat land 1. Government Subsidies/ tax breaks

Computing in the cloud is a commodity: Microsoft, Amazon, Google, VMware are in a race to deliver the lowest cost computing with the greatest flexibility

Very true. I started my career with my current employer at their old school datacenter about 15 years ago. The first few months they had me running cable (while wearing a suit) and fixing the color codes on their wire. A PhD in wire management, if you will. Back then the data center had about 20 people inside during business hours. I recently visited our data center after many, many years and it now runs better than it ever did back then with a skeleton crew of 3.