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

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.

8 Responses

  1. Jake Wilson 5 years ago
  2. Alysha 5 years ago
  3. Brandon Swain 5 years ago
  4. Alex Veater 5 years ago
  5. Nic LeCheminant 5 years ago
  6. Nick Fivas 5 years ago
  7. Brad Burkhart 5 years ago
  8. Sterling 5 years ago

Add Comment