Datacenters as corporate welfare: maximum incentives for minimum jobs.


Vern Burke, SwiftWater Telecom
Biddeford. Maine

I’ve just been reading the piece about the lawsuit over the proposed Verizon data center in New York. This story highlights exactly what is wrong with the mega-datacenter feeding frenzy that’s been going on and just how out of control it’s gotten.

The main complaint of the lawsuit is massive cutting of corners in the approval process for this datacenter. Can anyone seriously argue building a million square feet of sprawling mostly single story building has no environmental impact? How about water consumption and release for cooling all those servers? How about air quality requires for all the diesel backup generators for all those servers? I notice that even Microsoft has to get air quality permits for generators in their West Coast datacenters, I wonder what makes Verizon so special that they don’t make any environmental impact doing the same thing.

The characterization of a datacenter as just “a giant warehouse for computers” is a bit astonishing to me. If Verizon managed to convince everyone there was nothing more to a datacenter than that, I’m certainly impressed. Either that or these officials do know better but they think this explanation will suffice for everyone else who doesn’t know any better (move along, nothing to see here!).

Bad as this sort of thing looks, the ugliest part of this are the public subsidies. North Carolina has been a great state for ridiculous giveaways to attract huge datacenters with flashy corporate names and a tiny amount of jobs but this deal makes them look like amateurs. We now know that the going rate for buying jobs with public money is $3.1M each ($614M), surpassing the Yahoo datacenter deal at $2.1M a job. Do the math, how long would it take a modestly paying IT job to pay back $3.1M? And to do this on a 20 year basis? Given the usual life span of datacenters, that’s well more than the likely lifespan of any datacenter being built today, just due to the rapid pace of technology change. Divide it out, for workers to even make $3.1M in wages over 20 years means every job would have to pay in excess of $150,000 a year.

I’ve often remarked that I could do more good for the local community with 1/100th the subsidies being lavished on these projects. Unfortunately, I’m a small operator and the huge flashy photo op projects with famous names attached lend themselves to the publicity (over)hype much better, just as long as you don’t look at the math behind them.

It’s time to stop and do a sanity check on this whole process.

Email or call me or visit the SwiftWater Telecom web site for green data center services today.

swiftwater telecom rcs cloud computing logo

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