BUFFALO’S BUSINESS
Hosting data might be the region’s calling
In the the Internet age, where data moves at light-speed, you can store that information just about anywhere.
That’s why it was encouraging last week when a Toronto company, CentriLogic Inc., picked Buffalo as the site for its second U. S. data center, just months after Yahoo! selected Lockport for a much larger facility.
“It’s a real opportunity for Buffalo to be at the center of the digital economy,” says Robert Offley, CentriLogic’s president and chief executive officer. “It’s a way for Buffalo to be competitive on a national scale.”
To be sure, CentriLogic’s 23,000- square-foot data center in the Main Place Tower won’t cure the region’s economic woes. Data centers, even big ones like Yahoo!’ s, aren’t huge employers, but the jobs they do bring tend to pay better than the average.
CentriLogic is starting off with a skeleton crew of five at its downtown Buffalo data center, but if the company can find enough clients to store their data at the site, Offley thinks the facility could grow to 50 to 75 jobs within three years. The most skilled of those jobs could pay six-figure salaries.
Local economic development officials for years have been targeting data centers as a good match for the Buffalo Niagara region.
The servers and other computer equipment that make up the guts of data centers gobble lots of electricity, and so do the air conditioning systems needed to keep them cool. Those power costs can add up to 25 percent to 30 percent of a center’s operating costs. That makes the Buffalo Niagara region, with its low-cost hydropower, a good match with an industry that’s growing by more than 20 percent a year.
Add to the mix the region’s colleges and universities, pumping out thousands of graduates who often want to stay here but can’t find a suitable job, and there’s an ample supply of qualified workers.
“These are the good kind of white-collar jobs that will keep our kids in this community,” says Erie County Executive Chris Collins.
Mix in the region’s reasonable real estate costs and our location near Canada and within 500 miles of 40 percent of the U. S. population, and Western New York has the chance to carve out a competitive niche in a 21st century industry.
Cost comparison studies done by site selection firm Boyd Co. bear that out. The New Jersey firm’s research ranks the Buffalo Niagara region in the middle of the pack for overall costs, cheaper than big cities like New York City and San Francisco, but more costly than the most affordable sites in the central United States, like Sioux Falls, S. D., Bloomington, Ind., and Huntsville, Ala.
Offley says CentriLogic had no desire to save money by putting a data center far off the beaten path. “We still want to be in a location with a sustainable core of business,” he says. “We don’t want to be in the middle of nowhere.”
In Buffalo, the new data center will be far enough away from its sister site in Rochester that CentriLogic’s clients there could store their data here, and still not be so close that a big snow storm or a massive power outage in one place likely would affect the other. While Buffalo might get some snow storms, it’s not prone to the hurricanes, earthquakes and wild fires that plague other parts of the country.
“Buffalo is seen as a very safe place to host data,” Offley says.
With the economy still sagging and credit tight, Offley thinks there’s plenty of room for future growth for firms like CentriLogic, which provide third-party data hosting and management services for clients. Because costs typically top $1,300 per square foot to build a data center, few companies are willing—or able—to invest that kind of money in a data center of their own.
“The Internet is really ubiquitous,” Offley says. “You can really host data from anywhere.”
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