Google lands in Lenoir, N.C., as competition for data centers grows

Reliable and low-cost power are selling points for data centers

LAS VEGAS -- The benefits from Google Inc.'s decision to build a $600 million data center in Lenoir, N.C., (pop. 17,000) have started rolling in.

Some 400 to 500 construction workers are building the data center, which was announced in January and is going up less than a mile from Lenoir's downtown. The workers are staying at local hotels, buying from local shops and visiting health and fitness facilities. It's so close to downtown that it "could be an excellent place to have lunch" for Google's staff, according to the city's economic development director, P. Kaye Reynolds.

Google is already advertising for data center employees, including a data center facilities manager -- someone with experience managing a 50,000-square-foot or larger data center. The facility will employ about 210 people, nearly as many people as now work for the city of Lenoir itself.

Google's decision also gives this North Carolina area credibility as a data center location, said Scott Millar, president of the Catawba County Economic Development Corp. Catawba County is adjacent to Caldwell County, in which Lenoir is located. "Others will assume that their decision is valid as well -- just like Burger King going on the same corner as McDonald's."

Catawba County is developing a 200-acre site about 20 miles from Lenoir for data center development. The area was once known for furniture making, an industry that has taken a hit because of low-wage competition from overseas. In more recent years, it developed a fiber optics industry, making 40% of the world's supply of fiber optic cable, said Millar. In 1999, some 10,000 people were employed in that industry but after the dot-com bust, employment fell to less than half of that. It has picked up some since then since the tech economy strengthened, he said.

But Millar isn't assuming that Google's decision alone will be enough to draw other data centers. He was at the AFCOM conference here this week making contacts and telling people about the virtues of his area.

"I think the fishing is pretty good," said Millar. He was referring to his networking prospects at AFCOM -- not the streams and lakes back home in North Carolina.

Millar wasn't the only economic development official here. This was Pierre Leclercq's first time at the conference. He is director of business development for Belgium, and believes power costs in his country may be attractive to global users.

Another person on hand was Bob Cook, president of the El Paso Regional Economic Development Corp. in Texas, which recently decided to make attracting data centers a priority.

There are a lot of reasons behind any company's decision to relocate a facility. Many automakers, for instance, have opened manufacturing plants in the South because of lower wages and a lack of unions. But North Carolina has something that may be attractive to data centers, and that's relatively low power cost: 4.5 cents to 5 cents per kWh, said Millar. In other areas of the U.S., electricity costs 6 cents per kWh, 11 cents per kWh or more. This particular area in Catawba also has a strong electric grid infrastructure, which was built to support furniture makers, he said.

Relocating or building a data center far from corporate headquarters is a move only large companies are likely to undertake, according to users and vendors at the AFCOM conference.

Copyright © 2007 IDG Communications, Inc.

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