Report: Rackspace Scouting Oregon Sites

Economic development officials have been working with prospects interesting in locating data center operations in Oregon. Local media say one of the companies is Rackspace Hosting.

Rich Miller

October 3, 2011

2 Min Read
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Earlier this year, officials in Prineville, Oregon said they were in discussions with companies interested in building a major data center in the town, which is currently home to a huge Facebook server farm. Now the local media say chatter has focused on Rackspace Hosting as a prospect to locate a data center in Oregon.

The Oregonian says Rackspace is sizing up potential sites in Prineville and the Port of Morrow, citing "a person familiar with the project" who said Rackspace was halfway through a six-month option to purchase 100 acres at the Port of Morrow. Economic development officials in both areas have been actively courting data center projects.

"Rackspace is constantly looking for the best ways to expand our Data Center footprint and exploring options," company spokeswoman Rachel Ferry told The Oregonian. "At this point, we don't have anything to report on that front."

UPDATE: In our initial story we raised the possibility that Rackspace might be considering a "greenfield" data center construction project , since the initial projects in both Prineville and the Port of Morrow have been single-user data centers, rather than multi-user wholesale facilities. In recent years, Rackspace has leased plug-n-play wholesale data center space to house its fast-growing cloud computing operation. Rackspace has since clarified that it plans no change in that strategy.

"We have no plans to build our own data centers, and will continue to lease through third parties," said Ferry. "We are always looking for ways to expand our DC footprint, however, our strategy will remain the same."

The San Antonio company has leased space from DuPont Fabros Technology in Ashburn, Virginia and Elk Grove Village, Illinois. In the wholesale data center business, providers supply customers with turn-key suites of finished data center space. Leasing space can bring new capacity online more quickly than new construction, and requires less capital.

A Fast-Growing Cloud

Rackspace has added more than 12,000 new customer servers over the past year, with most of that hardware supporting the company’s cloud computing operation. Last month the company said it will expand its Chicago-area data center, adding 22,500 square feet of raised-floor space to house its servers, with an option to add even more space if its growth continues.The new space in Chicago, which adds about 3.9 megawatts of power capacity, will be deployed between July 2012 and early 2013.

If Rackspace is ready to expand its data center footprint, it will have access to capital. Rackspace has just finalized a $200 million credit line with a group of major banks including JPMorgan Chase, Wells Fargo, Barclays and Regions Bank. The credit line was included in a Rackspace SEC filing last week.

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