Posted By Rich Miller On September 16, 2010 @ 8:00 am In Facebook | 13 Comments
An analysis of Facebook’s spending with data center developers indicates that the company is now paying about $50 million a year to lease data center space, compared to about $20 million when we last analyzed its leases in May 2009 .
That jump in spending reflects increased investment in infrastructure as the social network has grown from 200 million users in mid-2009 to more than 500 million today. During that period, Facebook has added multiple data centers in two major Internet hubs: Ashburn, Virginia and Silicon Valley in California. The company has also announced plans to build a 300,000 square foot data center in Prineville, Oregon  for additional expansion.
Investing to Gain Lower Operating Costs
The $50 million a year in data center spending is for leases, and doesn’t include the cost of the Prineville project, which has been estimated at between $180 million and $215 million. Although the new facility involves a large chunk of up-front investment, the energy-efficient new facility will allow Facebook to significantly lower its operating costs.
As its growth has accelerated in the past two years, Facebook has managed its infrastructure costs through its relationships with “wholesale” data center landlords. Facebook currently leases nearly all of its data center space from four companies: Digital Realty Trust, DuPont Fabros Technology, Fortune Data Centers and CoreSite Realty.
Here’s what we know about Facebook’s spending on its major data center commitments:
That adds up to an estimated $40 million for the leases with the Digital Realty and DuPont Fabros, When you add in the cost of space for housing equipment at Fortune, CoreSite, Terremark, Switch and Data, Telecity and other peering arrangements to distribute content, we arrive at an estimate of at least $50 million in annual data center costs for Facebook.
Estimate Doesn’t Include Servers
That’s just for the facilities, and doesn’t include Facebook’s investments in server and storage hardware, which is substantial. Facebook is running at least 60,000 servers  in its data centers, and possibly more. There’s also the cost of electricity to power the servers, which is not included in the data center lease.
Facebook’s costs remain substantially less than what some other large cloud builders are paying for their data center infrastructure. Google spent $2.3 billion on its custom data center infrastructure in 2008, while Microsoft invests $500 million in each of its new data centers. Those numbers include the facilities and servers.
Facebook’s requirements don’t yet match the scale required by Microsoft and Google. But its costs are also lower because it has opted to lease wholesale data center space, rather than build its own facilities.
Wholesale Model Means Savings
Wholesale providers build the data center, including the raised-floor technical space and the power and cooling infrastructure, and then lease the completed facility. The tenant pays a significant premium over typical leases for office space, but is spared the capital investment to construct the data center.
In the wholesale model, users can also occupy their data center space in about five months, rather than the 12 months needed to build a major data center. This has positioned Facebook to continue adding servers as it’s audience grows by leaps and bounds, even as it awaits the completion of its Oregon facility. Even so, Facebook has already decided to expand the scope of the Prineville project  to more than 300,000 square feet of data center space.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2010/09/16/facebook-50-million-a-year-on-data-centers/
URLs in this post:
 May 2009: http://www.datacenterknowledge.com/archives/2009/05/18/facebook-20-million-a-year-on-data
 Prineville, Oregon: http://www.datacenterknowledge.com/archives/2010/01/21/its-official-facebook-is-oregons-company-x/
 Digital Realty Trust: http://www.datacenterknowledge.com/archives/category/digital-realty-trust/
 DuPont Fabros Technology: http://www.datacenterknowledge.com/archives/category/dupont-fabros/
 Fortune Data Centers: http://www.datacenterknowledge.com/archives/2009/11/06/fortune-gets-leed-gold-in-san-jose/
 CoreSite Realty: http://www.datacenterknowledge.com/archives/category/crg-west/
 Terremark Worldwide: http://www.datacenterknowledge.com/archives/category/terremark/
 Palo Alto, Calif. facility: http://www.datacenterknowledge.com/archives/2009/02/11/paix-a-key-hub-from-alta-vista-to-facebook/
 Telecity Group: http://www.datacenterknowledge.com/archives/category/telecity/
 60,000 servers: http://www.datacenterknowledge.com/archives/2010/06/28/facebook-server-count-60000-or-more/
 expand the scope of the Prineville project: http://www.datacenterknowledge.com/archives/2010/07/30/facebook-will-double-size-of-oregon-data-center/
 Facebook to Build Its own Data Centers: http://www.datacenterknowledge.com/archives/2010/01/20/facebook-to-build-its-own-data-centers/
 Facebook Goes Green With New Data Center Space: http://www.datacenterknowledge.com/archives/2009/11/05/facebook-goes-green-with-new-data-centers/
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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