The Best Place to Build a Data Center in North America
It's Kelowna, British Columbia, says IBM, which is working with Rackforce to open a huge data center in this small city far from earthquake and flood zones, close to cheap power sources and just a short flight from Vancouver.
By Matt Villano
As far as vacation destinations go, popular hotspots
such as Honolulu and California’s Wine Country have nothing on
British Columbia’s Okanagan Valley.
The area offers award-winning vineyards, tasty organic
produce, a 68-mile freshwater lake and nearly 50 golf courses,
all within an hour’s drive. The city of Kelowna, the de facto capital of the
region that boasts gourmet restaurants, world-class real
estate, an international airportand a cultural district
complete with museums, theater groups and a ballet.
But what most tourist brochures don’t mention is that the
Okanagan also is becoming known in IT spheres for something
else: data processing and storage.
Thanks to its seismic stability, cheap and accessible power
and a talented workforce, the Okanagan recently has seen a
proliferation of data services vendors and has attracted
interest from at least one major international corporation to
build one of the biggest data centers in the world.
When it opens later this year, this $100 million data
center—appropriately dubbed the Gigacentre—will
total 85,000 square feet and will have the capacity to store
nearly 35,000 terabytes of data. Put differently, the
Gigacentre will generate more than 700 watts per square foot,
while most data centers currently generate a maximum of 300
watts per square foot.
The Gigacentre is a joint venture between IBM and Rackforce, a local hosting service
provider. It will be IBM’s first data center in British
Columbia and is powered by hydroelectric energy from the
Columbia River. Interestingly, it’s not the first North
American data center to be powered by the Columbia, as the map below shows. Other
data centers from Google in The Dalles, Ore., and Microsoft
in Quincy, Wash., and Spokane, Wash., get their energy from
the same waterway.
Safe, Yet Close to the U.S.
Brian Fry, vice president and cofounder of Rackforce, says
the center, expected to open by this summer, will cement the
Okanagan’s position as the new data capital of the West—a
position that could be particularly intriguing for U.S.
companies who are looking to keep mission-critical information
“There’s a lot of data out there,” he says. “The Okanagan
provides a safe yet close place to store it for U.S. companies
to keep it under watchful eye.”
Rackforce isn’t the only local data storage company to meet
this demand; currently, there’s also a company named
Iron Diamond Networks, which provides
outsourced data center infrastructure services such as
disaster recovery, data backup and data replication.
Similar businesses are on the way—statistics from the
local economic development office indicate that nearly 20
percent of the 12,800 new business licenses doled out in 2007
were to high-tech firms.
This growth is contagious. Robert Fine, director of economic
development for the regional district of the central Okanagan
Valley, which covers the cities of Kelowna, Westbank and
Peachland, says that according to a Canadian growth index that
measures factors including unemployment rate, business starts
and building permits, the Okanagan economy has grown by a
staggering 11.1 percent since 2005, in step with growth in
other Western Canadian cities such as Vancouver and
“We think the local economy is going to slow down, but
everything around here keeps growing,” he says. At a time when
real estate is slumping in the U.S., Okanagan real estate is
skyrocketing—the current median price is $539,000, up
from $469,000 in 2006 and $374,000 in 2005.
Capitalizing on Environmental Stability
All this growth is fine and good, but what makes the
Okanagan such a great spot for data services? Environmental
stability, for one.
Geologic surveys indicate that the Okanagan is at
least 150 miles from the nearest earthquake zone. Climate
experts also have said that the region’s location in the
high desert makes it safe from other disasters such as
floods, tornadoes and major storms.
Perhaps the only natural risk: wildfires, which ravaged the
local countryside in the summer of 2003 but left most of the
urban areas relatively unscathed.
“We considered the threat [of fire], but when we assessed it
against threats in other geographies and other regions, it was
far down on the scale,” says Rick Ellery, territory services
leader for the British Columbia division of IBM Canada. “Even
with the fires, the Okanagan is one of the safest spots in
North America to build a data center.”
How to Pick a Good Data Center Spot
IBM has developed a list of data center
characteristics companies should consider before
socking their data away:
•Proximity to earthquake zones and flood planes
(at least 150 miles away)
•Stable and abundant electrical power
•Abundant network bandwidth from multiple
•Extensively scalable floor space
•Ability to provide separate customer spaces
(cages or separate rooms)
•Support multiple power & cooling densities
(watts per sq/ft)
•Security and fire suppression
•Work area/office space
•Low real estate costs
•Low operations costs
•Built to energy efficient “green”
•Available on-site eyes and hands services
•Data backup services; offsite data
Source: IBM‘s new division for business
continuity and resiliency services.
Cheap and Plentiful Power
The area offers another key ingredient to large-scale data
storage: cheap and plentiful power.
Just about all of the energy in the region is hydroelectric,
with two companies—FortisBC and BCHydro—pulling power from a
series of dams along the Columbia River (yes, the same
Columbia that empties near Astoria, Ore., starts in the
Kootenay Rockies region and eventually runs near the
While this energy is cheaper than traditional alternatives
such as coal or oil—hydro power can be as low as 2 cents
per kilowatt hour, compared to as much as 20 cents per kilowatt
hour for other means —it’s also “greener,” meaning the
process does not rely on renewable resources at all.
Furthermore, David Tarasenko, president and chief executive
of IronDiamond, says that by virtualizing certain accounts,
data storage providers can cut back on energy use by as much as
“As the environment becomes a bigger issue, green IT is
going to become a huge consideration for companies looking to
store data offsite,” he predicts. “Here in the Okanagan, we can
IT Labor Supply
A third and final reason data storage companies have
flourished in the Okanagan is that the area is home to a young
and talented workforce of IT professionals to keep things
Local high-tech companies such as Club Penguin, which was recently sold to
Disney for roughly $365 million, are
always bringing in workers from big cities like Vancouver
and Calgary. The relatively new University of British
Columbia at Okanagan also has a computer science program (14
graduates in 2007).
All told, the triumvirate of stability, power and smart
people create a perfect atmosphere for data storage in the
beautiful Okanagan Valley. The local economic development
director jokes that if this high-tech boom continues, the
region might just have to build a marketing campaign around its
new data center and IT.
“We used to call the area ‘Silicon Vineyard’ because we felt
the nickname perfectly captured the Okanagan’s mixture of
natural beauty and high-tech,” he says. “We haven’t used it in
a while, but who knows? It’s never too late to bring it