IT Strategy

Google and Microsoft’s Data Center Strategy

March 26, 2008 by Raj Sheelvant

“In the future, the competition between Google and Microsoft in the Web search business might be determined as much by data center energy efficiency as by which company writes the best search algorithm”. This according to the Business Week article “It’s too darn hot”.

According to the Environmental Protection Agency, data centers will require almost twice as much power by 2011 if current trends continue and according to article “Data Center Energy Efficiency Strategies for CIOs”, Gartner Inc. has predicted that the cost of supplying energy to a server over its three-year lifetime will soon exceed the server’s acquisition cost. The digital economy is pervasive and the demands for computing will grow exponentially, and to make Data Center profitable, electric consumption can’t keep growing at the same pace. Rising commodity cost and rising awareness of harmful effects of Global Warming is going to force both Google and Microsoft to come up with creative ways to reduce consumption of electricity.

So intense is the competition among these companies to lower their costs of processing data that they treat information about their energy use like state secrets. The Business Week article cites that “When Google built a data center along the Columbia River in Oregon a few years ago, it bought the land through a third party so its involvement was hidden, and the city manager had to sign a confidentiality agreement. In North Carolina, the state’s sunshine laws forced it to disclose the incentive package it offered Google to locate a data center there, but the company’s plans for power consumption were redacted as trade secrets”.Who would have imagined that ‘leaving a small ecological foot print’ is going to be strategic imperative for both Microsoft and Google?

Read my previous blog “Google and Microsoft reveal their Data Center Strategy?“  Also download McKinsey & Co /Uptime Institute Report to be released at Symposium 2008 Executive Summit

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