Pouring cold water on Apple’s massive new datacentre

25Feb10

The Apple tech blogs have been ripe with speculation about the massive, 500,000 square foot (46,500 square metre) datacentre Apple is building in rural North Carolina. Some have wondered whether this is confirmation that Apple will unveil a new “computing in the cloud” service, or other wild ideas. Here’s why Apple fans shouldn’t be getting their hopes up too much.

First of all, the only reason Apple is building this centre now, and in rural North Carolina, is because of a giant multi-million dollar tax-break. The local government created the tax-break scheme to encourage investment and the creation of jobs in the area. The window of opportunity to take advantage of this tax break is now. What does this mean?

It means that the new datacentre is not necessarily being built because Apple has immediate plans for some new service. On the contrary, it is just to take advantage of the tax-break. After all, most major datacentres are located near major cities, such as New York, Los Angeles, or San Francisco – not a rural part of the south. The reason for this is that large cities have greater and faster connectivity to the Internet. Thus, a large datacentre in such a location would be a poor choice for cloud computing, which, by it’s very nature, requires fast connections through fat pipes.

However, some have pointed out that the datacentre will be about five times the size of Apple’s current largest facility, over in California. Thus some jump to the conclusion that the building will be filled with five times as many servers, giving out five times as many data requests for some future and unannounced (but currently planned) new service from Apple. However, is this realistic? No.

These pundits are assuming that the building will be full of servers when it is completed — but why should it be? It is quite possible that the new centre will only be running at 50%, 40%, 30%, or even less of capacity. There is no rule saying Apple must fill all 500,000 square foot of space with working servers.

It’s much more likely that Apple has taken this opportunity of a tax-break to build a gigantic server farm, which will serve all their needs for the next 10 years. When it first opens, it will probably be less than half full — probably less than a quarter full. As time goes on, more servers will be installed.

This is entirely reasonable. If the iTunes store continues its growth, it is only logical that X number of servers will be required in X years time. This is especially so, considering the slow take-off of HD-quality movies sold or rented via iTunes. So, why not take the opportunity now, today, to use a tax-break to prepare for the increased demand?

Thus, the size of the centre is no basis to speculate about some new, unannounced “cloud computing” service, or any other fanciful idea. Further, the geographic location also makes that unlikely.

No, Apple is simply building a new datacentre in preparation for the future. Maybe at some point they will introduce some new, amazing, and incredible services over the cloud — but it would be foolish to take this as some sort of confirmation that such new services are imminent or even planned. The increased traffic Apple can reasonably expect to see over the next 10 years — simply from the iTunes store — could easily justify the construction of this new building.

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