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Want to Reduce Data Center Costs? Head for Minnesota

cold weather data centers minnesota

Want to Reduce Data Center Costs? Head for Minnesota

Darren Waldrep
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data storage solutionsServers and related data center equipment are getting smaller. However, this also means they’re getting more condensed, which means heat — lots of it. Heat is the avowed enemy of the data center: For optimum efficiency, a data center needs to remain cool.

For a data center in a climate with hot summers, this can mean massive cooling costs. These costs can be so high that it makes sense to locate a server farm or data center in a cold climate with frigid winters and cool summers—the sort of climate where air conditioning is rare and the locals complain if the summer temperature rises above 75 degrees Fahrenheit. Data center consulting companies are increasingly recommending locating server farms in cool climates.

Minnesota is especially well-suited for data centers and server farms. These facilities do not always require a large staff but it’s important to have IT talent available—which is why being too remote can be a mistake. So Minnesota combines a deep pool of IT talent, especially around the Twin Cities area, with cool weather year-round.

According to an article on the Minnesota Public Radio website, a company based in Iowa is building a $12 million data center in Duluth, Minnesota, precisely due to the cool climate. One “tenant” in the building is Essentia Health—which simply outgrew its ability to cool the building that housed its data center.

“We’ve outgrown mainly the power and cooling in these data centers,” Dennis Smith, Essentia’s director of technology systems, told MPR. “As these systems get more dense, hotter, we had to do something.”

The developer of the server farm believes it will only have to use air conditioning units 14 times a year. While server farms use significant amounts of electricity—even without the air conditioning—Minnesota still provides an advantage because power costs are in the bottom 10 percent in the United States.

It’s likely that IT companies in Minnesota will start to recommend that their clients locate servers in the state. This provides clients with added peace of mind—knowing their IT experts are close to their servers and related IT infrastructure. While few of the major players have located server facilities in Minnesota, they’ve chosen upper Midwest locations including Omaha, Nebraska; West Des Moines, Iowa; and Council Bluffs, Iowa.

To compete, the Minnesota government has been looking at legislation that would provide tax incentives to companies that locate server farms in the state. In addition to benefitting from the cold hard winters of Minnesota, companies could benefit from some cold hard cash—in the form of useful tax breaks.

How do we know so much about these benefits? Datatrend’s headquarters are in Minnetonka, Minnesota, which is west of Minneapolis in the Twin Cities metro area. We’ve experienced for ourselves the benefits of cold locales for data center implementation and so can you.  Consider Minnesota next time your company needs to expand or upgrade data center services – and consider Datatrend to help you do it.

Although there are benefits to server storage in Minnesota, our capabilities go beyond the state’s borders: Datatrend is ready to provide a wide range of IT solutions including server management and installation throughout the United States.

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  1. Erik
    ErikFeb 24, 2012

    Great article Darren – I would agree that one of the single largest issues facing data center managers today is the removal of the heat from the data center, and there are some significant advantages to locating a data center in a colder climate state like Minnesota (I too live in the Twin Cities). However, I’m a bit perplexed by so many of these states giving tax advantages to companies who want to build their data centers in those particular states. Is the economic impact high enough to justify these state financial incentives? Normally, once the data center is built, the number of employees required to run the facility is fairly lean, as in just a handful. What are your thoughts? By the way you mentioned that a company from Iowa is building a data center in Duluth – do you happen to know who this is?

  2. Darren Waldrep
    Darren WaldrepFeb 24, 2012

    Erik, thank you for your kind words and comments/questions. Yes, the fact that some states provide tax advantages to companies to build data centers in those states is a touchy subject. On the one hand, the argument is that the state has an overall interest in promoting the economic climate of the state which means the “investment” will pay off in spades. On the other hand, some complain that the economic impact is really a “zero sum” game or the data used to justify the tax policy is lacking. Nevertheless, the state’s tax policies and “business friendliness” are factors which a company should consider before making a long-term decision. So coupled with the notion that cooler climates mean overall lower cooling bills can make for a compelling argument in many cases. As for the number of people required to run the facility, it is indeed fairly lean due to economies of scale and use of similar infrastructure, standards, etc. As for the company from Iowa, I believe you may be referring to the MPR article which describes how Involta, based in Cedar Rapids, Iowa, is building that data center in Duluth, Minnesota. Thanks again for your comments, Erik. Perhaps other readers will chime in with their thoughts, including on the tax incentives subject matter.

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