When you think of data centers, you probably picture a giant server farm in a rural area, where electricity is cheap and tax breaks are plentiful. Big tech companies like Google, Amazon Web Services, Microsoft and Meta have located millions of square feet worth of server space in places like Northern Virginia or Hillsboro, Oregon. But now, to reduce latency, companies are increasingly weaving the nodes of their networks into the fabric of cities. For example, the One Wilshire building in Los Angeles, formerly home to a network of law offices, now oversees one third of all internet traffic between America and Asia.
For the uninitiated, these urban physical internet nodes may not look like anything at all. And that’s by design. Equinix, the largest owner of location data centers with 10.9% of the world market, operates data centers that are often not supposed to attract their attention. In Dallas, the company owns a large industrial building just outside the city center that serves as a data center and the headquarters of a for-profit college. In Tokyo, activity is mostly conducted on different floors in the city’s sea of skyscrapers, “so you won’t even know it’s there,” said Jim Poole, vice president of business development of the company said. In Sydney, Australia, Equinix is building a new expressionist-style data center that resembles the city’s famous opera house. And around one of its facilities in Amsterdam, Equinix built a moat — less for security, says Poole, than to make the building fit into its surroundings, as Amsterdam is a city of canals. “For the most part, people really try to make their buildings fit for the environment,” he said, adding that sometimes local regulators even ask for it.
Demand for such facilities, especially in urban centers, is growing rapidly: last year, spending on location data centers increased 11.7%. The biggest cloud companies are not far behind. Amazon Web Services has promoted miniature data centers, which it calls Local Areas, close to major residential areas; so far, it has placed them in 32 cities throughout the United States. This trend has even caught the interest of Walmart, which may be starting soon lease portions of the superstore to host data centers for third-party companies.
One explanation for the boom in demand, says Poole, is that consumers themselves have changed. As our lives become more and more online, “people’s tolerance for latency continues to decrease,” he said. The main drivers are apps where millisecond latency can prove to be crucial: you may not notice a quarter second delay on Netflix, but you’ll certainly see it if you’re using the app. Betting on sports online, trading stocks or participating in a multiplayer game like Fortnite.
For example, companies like Google, Amazon, and Microsoft are betting on cloud gaming, which involves streaming games over the internet without a console or phone to provide processing power. But many popular games, such as first-person shooters, “require a lot of fast reaction times and therefore really fast connections,” said Jabez Tan, head of research at Structure Research. , said. And such games would not work on the streaming service without the help of the large number of data centers.
