Three reasons why eBay’s Topaz data center costs 50% less to operate

February 22nd, 2011 | Posted by admin in C7 Data Centers | Editorial

Data Center Insights by C7 Data Centers, a Utah colocation data center provider.

eBay opened their Topaz data center in Salt Lake City, Utah on May 4th, 2010. On May 25th, Dean Nelson, Sr. Dir, Global Data Center Strategy, Architecture & Operations for eBay and project lead for the Topaz data center, wrote in his website that ” We have built a fault tolerant Tier IV level data center that is 50% less expensive to operate than the average of all other data centers we lease today. ”

A 50% decrease in data center costs is incredible. So let’s look at three reasons why eBay’s costs for the Topaz facility are so low, and hopefully uncover why Utah provides data centers a distinctive advantage.

eBay Topaz Data Center
Meg Whitman, eBay President and CEO came to Utah in March of 2008 and spoke to members of the Utah technology community. It was likely that Mrs. Whitman was also evaluating plans to build in Utah at that time for in December of that same year eBay announced it would build a $334 million data center in Utah.

Working with the Utah Governor’s Office of Economic Development, eBay was able to negotiate a reported $27.3 million in tax incentives for the company over a 10 year period. Although these incentives decrease the operational costs that the Topaz facility enjoys now, it is temporary, and after 10 years those taxes will expire and the operational costs will go up.

The second reason for reduced operational costs is the Utah climate and cooling efficiency technologies. eBay has a 400,000 gallon cistern which collects rain water and will be used as their primary cooling source. They also use a water side economizer, which allows them to use the outside air to cool the data center for more than half the year instead of running expensive chillers. In addition, eBay monitors the power usage and only delivers what the compute load demands. These three technologies employed at the Topaz data center allow further cost savings through a reduction in power consumption.

The third and main reason eBay’s Topaz data center costs 50% less to operate is the availability of abundant cheap power. This is due to the tremendous coal energy production in Wyoming and central Utah. In 2008, Wyoming produced 10,884.75 Trillion Btu’s of energy, second only to Texas’s 12,023.86 Trillion Btu’s. Utah is on the list at #15, with 1,175.43 Trillion Btu’s.

With tremendous coal reserves in Utah and Wyoming, and with the low shipping costs to haul the coal to Utah coal-burning power plants, Utah has a distinctive low cost power advantage over other states.

Rocky Mountain Power is the major regional utility that is able to provide these extremely low power rates. For example, the commercial power rates in Utah are less than the cost of industrial power rates in California.

Although there are additional benefits to building a data center in Utah, none are as significant as the tax incentives, power cost savings and reduced power consumption from using ambient air cooling. And eBay did a great job leveraging all three of these.

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8 Responses

  • Jake Wilson says:

    Innovations in cost-reducing technologies, like the ones so effectively used in ebay’s Topaz data center, are certain to create a demand from customers for more data centers like it in the Utah area. Whoever provides it best and quickest, with lower costs to the customer, will gain the upper hand in this growing market.

  • Alysha says:

    Utah is a great Data Center location. In choosing a data center, location is key. The Utah location offers so much in the market – even more than location. Great service and a highly educated population also mean that service will be better.

  • Brandon Swain says:

    That is pretty amazing how much lower the cost of running Ebay’s Utah data center is compared to some of their other facilities. It’s definitely an eye-opener to how much Utah has to offer to companies looking for data center space.

  • It surprises me that other major companies still have their data centers located in other states vs. Utah. Just having cheap power and being located in a cool climate should be enough of an incentive to relocate or build new data centers in Utah just like how eBay has done. 50% reduction is impressive!

  • Nic LeCheminant says:

    This article shows 2 things. The first, the benefits of planning everything out to find every possible way to cut costs. You can tell that eBay thought every little part of this out to find every little area in which they could cut costs. Second, the great benefits of placing your data center in Utah: low power costs being a big one.

  • Nick Fivas says:

    Power costs is a big deal for a data center. Ebay was smart about taking there time and figuring out ways to lower there operating costs, and building in a low power cost state didn’t hurt either. Power costs in Utah makes a good location for data centers to build.

  • Brad Burkhart says:

    One of the best things about Utah is our state and local government’s willingness create an enviroment where companies can grow and prosper. They do this by offering incentives to expand here.

  • Sterling says:

    It will be interesting to see how weather and environment based cooling technology continues to develop. Datacenters are really in a class of their own in terms of power consumption and power infrastructure, so it won’t be a big surprise to see new technologies emerging in the collocation industry. Ideally those innovations will then be adapted for deployment in residential and commercial development more broadly.

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