A Peek Inside the Secret World of Data Centers

Las Vegas is an attractive location for IRL internet clouds. One company shows us why

It may be called the cloud, but the life you lead on the internet does not exist in some fluffy white ether. Instead, the backup to your smartphone, lengthy Facebook history and Google searches flow through endless rows of computer servers stacked in giant, nondescript warehouses called data centers. Driving by one, you would never know that the World Wide Web was housed within, but Las Vegas is home to approximately seven companies that operate these internet hotels. One of those companies is Peak 10 + ViaWest.

To put the nuts and bolts of the internet in perspective, experts have estimated that one Google search could run through 1,000 servers. Big internet companies, such as Google, Facebook and the National Security Agency (NSA), build and operate their own data centers, but other companies lease space from operators just like Peak 10 + ViaWest.

When companies provide their own computers, the practice is known as co-location. When they ask the data center to supply and manage the computers in addition to the space for the servers, it is known as the cloud.

Vegas is an attractive location for data centers in part because a lack of natural disasters makes it easier to maintain an internet connection, and also because being close to California attracts major corporations with operations in Los Angeles and San Francisco. If something goes wrong with the computers, getting to Las Vegas is easy.

“There is tremendous demand for California-based companies to get out of California, away from the threat of natural disasters, high taxation and high power costs,” says Dave Leonard, Peak 10 + ViaWest’s chief data center officer.

Accessing the main floor of Peak 10 + ViaWest’s Lone Mountain data center requires an escort with the right fingerprint to unlock two separate doors. Once inside, it is a Walmart-sized maze of black cages filled with towers of blinking and whirring computers. Each cage houses a different client’s online happenings, and some of the cages have roofs as if to protect them from a Mission Impossible–inspired break-in. But Todd Gaither, the amiable data center manager for Peak 10 + ViaWest, explains that some companies are required by regulatory agencies that govern the handling of data to have the extra protection. For example, there are specific rules for digital medical records. Part of Gaither’s job is to ensure the facility meets the needs, including security compliance, of every client. He beams about the comfortable café and clean showers available for clients who might have to work out of the center as the result of a natural disaster, for example.

“We have agreements guaranteeing that they will not lose power, cooling or connectivity at any time,” Gaither says. “You can lose millions of dollars of revenue if you go down.”

Because of this, the data center is a masterpiece of what-could-possibly-go-wrong thinking. There are two separate power feeds from NV Energy and two independent power generators out back, meaning the data center has four separate sources of power, in addition to a room of fully charged batteries just in case the four sources fail. Lone Mountain at full build is backed up by 16 megawatts of on-site generation, enough to power 13,000 American households.

Power use along with the amount of water required for cooling the buildings raise concerns about the environmental impact of data centers, but Leonard says the facilities do not create new demand. If not at the data center, the computers would be sucking up power and requiring cooling somewhere else. He compares a data center to a bus: “The bus carries the same demand as individual cars, but in aggregate it carries demand much more efficiently than cars,” he says. He explains that in the same way that a bus transports multiple individuals efficiently, a data center houses multiple computers and can reduce the overall use of energy by as much as 50 percent. “Don’t hate the bus,” he jokes.  

The state certainly doesn’t hate “the bus.” In 2015, the Nevada legislature passed a bill  providing tax abatements for data centers and their clients. These tax abatements decrease the amount the company is required to pay in sales, use and property taxes. “[Data centers] represent a tremendous capital investment in our state—billions of dollars in construction and the [computer] racks themselves—and there is equipment turnover every two to four years,” says Brian Baluta, communications director for the Governor’s Office of Economic Development. “There is tax revenue above and beyond abatement.”

ViaWest received approximately $4 million in tax abatements based on an investment of $50 million. The abatements come with requirements. To receive a 10-year abatement, a data center must invest a minimum of $25 million and create at least 10 jobs. That is just one of several requirements, but Dr. Dave Swenson, an economist at Iowa State University, argues that most of the high-tech concrete boxes employ relatively few people and purchase most of their equipment out of state. “The local economic impact is so puny,” he says. Swenson believes that data centers overstate their economic impact in order to gain abatements, which in turn helps the companies maximize profits.

But Leonard is quick to disagree. He points out that the power requirements for their data centers, which, in addition to Lone Mountain, includes two smaller facilities Downtown, help to lower the overall cost of energy for the public by stabilizing demand. In other words, because data centers use a great deal of energy, consumers end up paying less. As for jobs, he points out that the Las Vegas data centers may only employ around 30 people full-time, but because of construction and maintenance needs, it effectively employs an additional 40 or so locals year-round. Plus, according to Gaither, the company is incredibly community-focused. For example, they provide every employee with one paid day of vacation in order to volunteer, and there is an expectation that you make the time to do it.    

Experts have suggested that tax incentives are not a large part of the decision-making process for companies when determining where to open facilities, so it is possible data centers would continue to expand without the breaks. Determining the exact economic impact of the hulking desert fortresses may be impossible, but given our unrelenting use of computers and smartphones, their presence and continued growth seem inevitable.