Datacenters are big business for Hillsboro, but how do they work?
When touring part of Flexential's datacenter campus, called Hillsboro 3, one gets a sense of just how much power, equipment, money and personnel goes into operating Oregon's growing tech sector.
Industry experts say the demand for datacenters is increasing, and the flurry of developments Hillsboro has already seen isn't subsiding any time soon.
A massive room of "cabinets," or shelves stacked and filled with servers and other computer equipment, lies below an overpass accessible through the lobby stairwell. The dozens and dozens of rows of shelves that stretch below are just one-quarter of the total capacity of the building.
Three other massive rooms, also filled with clients' equipment, make up the rest of this datacenter — one of five datacenters that Flexential owns or plans to build in Hillsboro.
And Flexential is just one of several datacenter companies in town.
But what makes these facilities necessary, and why have they become such big business for Hillsboro?
Bill Cory, Flexential's regional vice president of sales, says that datacenters are basically the infrastructure that all of our phones, tablets and computers operate on.
Sure, the device itself has a series of circuits, chips and processors all hooked up to a screen and battery that's wrapped in a plastic or aluminum body.
But where does all the software, and all the data that passes from one device to the next, come from?
They come courtesy of datacenters, which are like the highways — and warehouses — of the internet.
In the same way railroads and interstates were needed to handle all the new vehicles and products being transported across the country, datacenters have to be built to process, store and compute all the information that gets delivered to customers.
"Really, just everything going online — all the smartphones, all the apps that go onto smartphones," Cory said of what's driven the demand for datacenters. "It's a little grandiose to say but all the apps that we all use all day everyday, that we think of as 'the cloud' … the cloud does actually exist somewhere, and it's in datacenters."
The boom in smartphones, computers, social media and cloud storage has caused the demand for datacenters to skyrocket, and building them has brought billions of dollars into Hillsboro.
Flexential, which owns datacenters across the country, first began its operations in Hillsboro with one datacenter in 1999. It was a 4-megawatt building, meaning it was capable of providing that much power capacity for clients. That building lasted Flexential about 16 years before the company had to build a new one to meet growing demand.
In 2015, Flexential built the Hillsboro 2 datacenter. It had an 18 MW capacity and lasted only about six years before its capacity was sold out.
The Hillsboro 3 datacenter, which isn't even done being developed, is a 36 MW site. It sold out in about a year.
Now, Flexential is preparing to build out its Hillsboro 4 facility. Hillsboro 4 will be a 50 MW site and is expected to start selling space to clients in late 2023 or 2024.
Big clients, big power
Like most datacenter companies, Flexential is hush-hush on who its clients are. Strict non-disclosure agreements and security measures are designed to ensure that the proprietary technology isn't seen by competitors or even would-be thieves.
The software that is built or stored on these machines is valuable. The cabinets themselves are contained in metal cages wrapped with vinyl sheeting. It's real spy movie stuff, as security guards are always on-site and infrared beams trigger alarms if someone or something tries to climb over these barriers.
Not only does it take energy to power the clients' equipment and Flexential's, but the building is wired with security cameras, electronic locks and thumbprint scanners that monitor access to the most secure areas.
All this takes a lot of electricity.
Right next door is a new Portland General Electric substation — evidence of the kind of infrastructure investment that has gone into Hillsboro in the past 20 years, targeted to appeal to the datacenters and clients who stock them, like microchip makers and social media providers.
Cory said that when Intel Corp. moved into Hillsboro in the 1980s, it prompted PGE to design more reliable substations, since tech and manufacturing clients lose money when the power goes out. Now, the utility supplies around these campuses are some of the most reliable in the entire state.
And Flexential builds the same redundancy and reliability into its own power system so that, in the rare instance of a power failure, it can continue powering its clients' equipment. There are 13 massive diesel generators that kick on in seconds if such an outage occurs.
All this power generates a lot of heat, which is why datacenters are built around cooling systems that prevent equipment from overheating.
All of that power and water usage comes out of the company's bottom line. But Cory said datacenter design and construction is all about efficiency. Flexential, and businesses like it, want to use as little electricity and water for cooling as possible, while still serving their clients' needs.
Flexential secured special financing last fall that requires the company to waste zero water with its cooling systems, and the company must operate the datacenters built with those bonds to have 1.4 power usage effectiveness (PUE).
Getting a PUE as close to 1 as possible is good, but Cory said older datacenters tend to operate at around 2 or above.
What does that mean? If Flexential's datacenter provides 36 MW of power to its clients, the PUE is the multiplier used to determine how much total power is used in the building to provide that capacity.
Take 36 MW and multiply it by 1.4 to get a total power usage of about 50.4 MW at Hillsboro 3. Power effectiveness isn't just about saving money by making that number as low as possible — it's also about attracting clients.
"Our customers demand that of their suppliers," Cory said. "Which is not to say we don't also think it's important to be good citizens of our community and of the environment, because we do … but the way we design our building is in response to the market and what our customers want from us."
Less power usage by the datacenter means more capacity for the client, and lower utility bills for Flexential means better prices on that capacity.
Which is not to say that other factors haven't impacted the pricing. The COVID-19 pandemic disrupted construction timelines and inflated the prices of virtually everything that goes into building and maintaining a datacenter.
"We've seen slower lead times for the various component parts necessary to complete our projects, as have our industry peers," Cory said. "Projects are taking longer to complete than they used to as a result. … We've also have seen higher prices for many components that go into our buildings, and as a result, (we) have had to increase prices we charge as well."
But COVID also moved even more of daily life online and into the digital space. That, as Cory noted, has only increased the demand for the capacity that datacenters provide.
"That demand isn't going away," Cory said. "If anything, it's going up."
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