Google’s Data Center Building Boom Continues: $1.6 Billion Investment in 3 Months

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Google’s extraordinary data center building boom continues to drive its spending, as the company invested a record $1.6 billion in its data centers in the second quarter of 2013. It marked the third consecutive quarter, Google spent more than $1 billion on data centers and servers, reflecting the company’s latest wave of data center construction projects.

The capital expenditure (CapEx) numbers were disclosed Thursday in Google’s earnings report for the second quarter, which ended on June 30. The Internet services giant fell short of Wall Street’s expectations, amid tight scrutiny of its advertising performance.

While results may fluctuate from quarter to quarter, the need to invest in infrastructure continues apace. Google had pumped $1.2 billion into its server farms in the first three months of 2013, topping the $1.02 billion from the fourth quarter of 2012. The only time the company has spent more on capital expenditures was the fourth quarter of 2010, when it spent $2 billion purchase of 111 8th Avenue, primarily for its office space.

Google’s data center construction will likely continue at high levels in coming quarters, as since November the company has announced a $200 million expansion in Council Bluffs, Iowa, a $600 million expansion at its campus in Berkeley County, South Carolina and another $600 million to expand its campus  facilities in Lenoir, North Carolina, and $390 million to add capacity to its facility in Belgium. Google is also expanding its infrastructure in South America and Asia.

Here’s a look at Google’s quarter-by-quarter spending on capital expenditures.

  • 2Q 2009: $139 million
  • 3Q 2009: $186 million
  • 4Q2009: $221 million
  • 1Q2010: $239 million
  • 2Q2010: $476 million
  • 3Q2010: $757 million
  • 4Q2010: $2.55 Billion
  • 1Q2011: $890 million
  • 2Q2011: $917 million
  • 3Q2011: $680 million
  • 4Q2011: $951 million
  • 1Q 2012: $607 million
  • 2Q 2012: $774 million
  • 3Q 2012: $872 million
  • 4Q 2012: $1.02 Billion
  • 1Q 2013: $1.20 Billion
  • 1Q 2013: $1.60 Billion

A capital expenditure is an investment in a long-term asset, typically physical assets such as buildings or machinery. Google says the majority of its capital investments are for IT infrastructure, including data enters, servers, and networking equipment. In the past the company’s CapEx spending has closely tracked its data center construction projects, each of which requires between $200 million and $600 million in investment.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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