Service Provider Networks /
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A big space to fill
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Forrester Research analyst Jeanne Schaaf says uncertainty among utilities in predicting power use at hosting facilities is causing power companies to guard in advance against getting caught short. They're particularly wary of new facilities run by collocation providers that may be selling to a variety of service providers and Web-centric companies with whom they have no other relationship. "A [collocation] client buys a cage and does what he wants with that cage," Schaaf says. Indeed, established hosting providers say speculators - who have seized on huge projected demand for hosting that appears unaffected by the slowing economy (see graphic, right) - are forcing concerns about overdevelopment of new Internet interconnection centers. "Fears of a [collocation] glut have mostly come from activities of those people," says Jay Adelson, CTO at Equinix, an established collocation and Internet backbone interconnection provider. "I talk to a lot of those real estate folks who seem to think this is an easy business," Forrester's Schaff says. The power concern joins related issues suddenly forced on collocation centers over the past few months by city governments. For example, municipal zoning officials in Washington, D.C., recently came close to blocking the construction of four hosting and collocation facilities - including a 650,000-square foot facility proposed by Level 3 Communications - until the companies made a variety of environmental and employment concessions (The Edge). But the power issue may linger even after zoning issues are settled, because the typical power supply for a Web hosting facility runs more than 100 watts per square foot, compared to the average five to 10 watts per square foot throughout commercial office space. "The grids were not developed to support that kind of distribution in the city center," says Equinix's Adelson. "We're not in the city center for precisely that reason." A Commonwealth Edison spokeswoman confirmed that the utility has instituted large deposits for newly built collocation centers. And a local journal, Crain's Chicago Business, last week cited a Commonwealth Edison official's comments that greenfield collocation centers built on speculation are a "risky proposition for a utility." Some national collocation companies say they're protected against this problem because they deliberately build smaller facilities - typically 10,000 to 20,000 square feet - in multiple locations, rather than larger hosting centers over 150,000 square feet in size. "That's the power of a small town delivered to one block," says Robert Lamb, vice president of business development with Colo.com, which operates two dozen mostly smaller facilities nationwide.
Power deposits could slow collocation
Concerns over electric use compound zoning hurdles in march toward more hosting room.
 
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The nationwide effort to build millions of square feet of new hosting and carrier collocation space could be set back by new requirements from electric power utilities.
At least one electric utility, Chicago's Commonwealth Edison, has been telling so-called telecom hotels and multicarrier Internet data centers to pony up multimillion-dollar deposits before building new space. So far the movement to force large power deposits appears to be affecting primarily speculators - many coming out of the commercial real estate industry - who have been proposing new collocation space in or near downtown areas. But industry experts warn that the movement could spread to major Web hosters and so-called neutral collocation facilities builders, especially if the power crisis in California intensifies or spreads.A big space to fill
Sign up for our "View from The Edge" newsletter to keep up with all of the news from The Edge.
Forrester Research analyst Jeanne Schaaf says uncertainty among utilities in predicting power use at hosting facilities is causing power companies to guard in advance against getting caught short. They're particularly wary of new facilities run by collocation providers that may be selling to a variety of service providers and Web-centric companies with whom they have no other relationship. "A [collocation] client buys a cage and does what he wants with that cage," Schaaf says. Indeed, established hosting providers say speculators - who have seized on huge projected demand for hosting that appears unaffected by the slowing economy (see graphic, right) - are forcing concerns about overdevelopment of new Internet interconnection centers. "Fears of a [collocation] glut have mostly come from activities of those people," says Jay Adelson, CTO at Equinix, an established collocation and Internet backbone interconnection provider. "I talk to a lot of those real estate folks who seem to think this is an easy business," Forrester's Schaff says. The power concern joins related issues suddenly forced on collocation centers over the past few months by city governments. For example, municipal zoning officials in Washington, D.C., recently came close to blocking the construction of four hosting and collocation facilities - including a 650,000-square foot facility proposed by Level 3 Communications - until the companies made a variety of environmental and employment concessions (The Edge). But the power issue may linger even after zoning issues are settled, because the typical power supply for a Web hosting facility runs more than 100 watts per square foot, compared to the average five to 10 watts per square foot throughout commercial office space. "The grids were not developed to support that kind of distribution in the city center," says Equinix's Adelson. "We're not in the city center for precisely that reason." A Commonwealth Edison spokeswoman confirmed that the utility has instituted large deposits for newly built collocation centers. And a local journal, Crain's Chicago Business, last week cited a Commonwealth Edison official's comments that greenfield collocation centers built on speculation are a "risky proposition for a utility." Some national collocation companies say they're protected against this problem because they deliberately build smaller facilities - typically 10,000 to 20,000 square feet - in multiple locations, rather than larger hosting centers over 150,000 square feet in size. "That's the power of a small town delivered to one block," says Robert Lamb, vice president of business development with Colo.com, which operates two dozen mostly smaller facilities nationwide.
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