Data Center Dev Notes Flashcards
What’s the typical dev cost of a data center?
$10 million per MW of load capacity
What are the 3 types of revenue models / lease structures for data centers?
Wholesale, Colocation, Powered shell
What are the financial performance metrics of data centers?
Return on invested capital (8-12%) and IRR (12-15%)
What are operational metrics of data centers?
Power usage effectiveness (1.2.-1.5) and revenue per sq foot ($150-$500)
What are the primary risks in data center dev?
Tech obsolescence and Power procurement
What is AWS’s data center expansion strategy? (3 things)
- Focused on availability zones (AZ’s)
- Access to low-cost power and low-latency fiber
- Global expansion
What are the priorities in AWS site selection? (4 things)
- Power availability and cost
- Fiber connectivity
- Land and zoning
- Environmental considerations
What are AWS’s power and sustainability initiatives?
- 100% renewable energy by 2025
- Efficiency and cooling innovation
- Grid scale energy storage solutions
What is AWS’s development and construction process? (3 things)
- Speed (modular and prefab)
- Leasing or Building (AWS prefer to own and operate but do lease from colocation providers if necessary)
- Vendor and supply chain management (AWS has strategic partners to mitigate supply chain risks)
What are some key challenges and Industry Trends affecting AWS? (3 things)
- Power constraints
- Regulatory scrutiny
- AI & High density compute (require more performance and cooling)
What is an AZ? What’s an example?
An availability zone is a location within an AWS region that consists of one or more separate data centers.
An example would be US-East-1 in Virginia
How do AZ’s work in AWS’s infrastructure? (4 things)
- Each AWS region has multiple AZ’s
- They are physically separated
- They have redundant power, cooling and networking
- Low latency connectivity between AZ’s
Why are AZ’s so important to AWS? (4 things)
Because they meet the demands of cloud infrastructure requirements such as:
- Fault tolerance and disaster recovery
- Scalability and load distribution
- Compliance and data residency
- Network optimization
How do AZ’s affect AWS Site Selection and Development? What are they looking for? (4 things)
- Power Grid Independence (each AZ must have access to backup power)
- Network redundancy (AWS ensures that multiple fiber paths exist between AZ’s)
- Geographic separation (AZ’s are placed far enough apart to prevent a disaster from taking down multiple zones)
- Land and expansion space (to accommodate future development)
What is a real world example of an AZ?
US-East-1 (Northern Virginia) is AWS largest region with 6+ locations and the highest density.
What are the core focus areas for AWS Site Selection? (4 things)
- Power availability and cost
- Fiber connectivity
- Zoning
- Environmental Compliance
How does AWS design and engineer a site? (3 things)
- Modular Design
- Scalable power and cooling infrastructure
- Sustainable energy
AWS prioritizes flexibility in design, allowing for future retrofitting to accommodate AI and high-performance computing (HPC) workloads.
How does AWS speed up the permitting and pre-con process?
AWS works with a network of global suppliers and pre-negotiates large-scale orders to speed up procurement.
Describe the AWS Construction and Deployment Process
- Site Preparation (land is graded, foundations laid, and infrastructure for power, water and fiber is set up)
- Structural build out (modular components are assembled for rapid deployment)
- Power and cooling systems are installed
- Networking and security systems are installed
- Testing and commissioning is commenced to ensure reliability for customers
What are some construction challenges and how does AWS address them?
- Power Constraints
* Challenge: Power grid limitations in key regions (e.g., Northern Virginia, Phoenix).
* Solution: AWS works directly with utilities to build new substations and invests in grid-scale battery storage. - Supply Chain Delays
* Challenge: Shortages of electrical transformers, cooling equipment, and steel impact build timelines.
* Solution: AWS pre-orders materials in bulk and works with multiple vendors to secure alternative supplies. - Local Regulations & Permitting Delays
* Challenge: Complex zoning laws, environmental impact studies, and permitting delays can slow projects.
* Solution: AWS has dedicated government relations teams that work with local regulators to streamline approvals. - Sustainability & Water Usage Concerns
* Challenge: Data centers require large amounts of electricity and, in some cases, water for cooling.
* Solution: AWS is shifting to waterless cooling, low-carbon energy sources, and advanced energy-efficient chips to reduce power consumption.
What’s one of the largest opex expenses for data centers?
Volumetric energy costs
