For some users, microseconds count, so proximity is important; ‘We spent a lot of money bringing in a ton of fiber’
The internet may, in fact, be a worldwide web, but being in the neighborhood of one of its bigger nodes can sometimes make your work faster.
“One of the many good things that data centers bring to a community,” said Sean Farney, who’s in the data center real estate business, is that “the community will get way, way, way, way better throughput and connectivity. All this fiber that’s brought in just enables everyone to do things faster on their computers and devices and on these things we carry around in our pocket.”
“When you build out a data center, you bring in all kinds of fiber connectivity.”
Farney now is the Milwaukee-based vice president of data center strategy in the Americas for JLL, the big Chicago-based commercial real estate company. That means he has a professional interest in seeing that data centers get built, and his resume includes past work for Microsoft managing the building of a data center.
He’s been in the industry 30 years, “28 of them in obscurity,” he said. Suddenly, everyone’s interested.
In his view, a chance for an improved connection to the internet is underappreciated. The data center he helped build is in the inner-ring industrial Chicago suburb of Northlake, right along the Tri-State Tollway. Northlake wasn’t especially well-connected.
“There wasn’t a lot of fiber, and we spent a lot of money bringing in a ton of fiber, and suddenly the city of Northlake, Ill., had all this great bandwidth and capability,” he said.
The effect is gaining attention. Advocates for urbanism urge cities to negotiate for better broadband, since the data center industry is installing it. European think tanks tout better internet access for rural companies. As one telecom executive told a panel last year, it used to be that data centers were built near ample fiber optic pathways, but now developers are looking for places with enough electricity, “and then everyone else has to figure out how to get to me” with fiber.
The increased willingness of data center developers to pay for installing fast internet connections, said JLL’s Farney, means that the more rural a data center’s site, “the more that becomes a boon for local folks.”
Geography also matters for what’s called “latency,” the small but often important amount of time it takes signals to travel from a user to whatever data center holds the information he’s using. In stock trading, for example, it makes a difference that one data center in New Jersey is 40 microseconds farther from Wall Street by fiber optic cable than another one.
Data centers are about a lot more than just AI
Farney notes that most information and processes for internet users involve a data center. “Cloud” applications as corporate video calls, the photos of a Facebook user’s grandchildren, or streaming TV shows amount to half the workload in U.S. data centers, and the effort to reduce latency — so the video call doesn’t freeze up or the patient’s X-rays can be found — is one reason for putting new data centers nearer to potential users.
Artificial intelligence, which constitutes a rapidly growing share of data center workloads — projected at 27 percent next year — adds new advantages for low-latency nearness. AI, said Farney, is moving from the training phase, when large-language models such as ChatGPT or Grok were taking in information, to the “inference” phase, where users “can pull insights out of all that data.”
“Some of this insight generation needs to happen close to the customer,” he said. Take autonomous cars: “You wouldn’t want to be waiting around for your data to make this huge loop and come back to the car while you’re sitting there, not driving.”
Even short lags — that is, low latency — is noticeable in some uses. Even a 10 millisecond delay in rendering an image in a virtual reality headset can give a user a feeling of seasickness. Autonomous cars may require latency of under 1 millisecond.
“For some of the inference use cases,” said Farney, “we draw this hundred-mile or three-millisecond circle around the data center — that’s the acceptable amount of latency.” Being nearby is attractive to companies whose products or processes will need low latency.
From the data center developer’s viewpoint, said Farney, the geography that matters used to involve many factors — existing fiber, available water, skilled labor. “That’s changed radically,” he said: Now it’s about available electric power, allowing for a short time to start-up.
“Water is no longer a consideration,” he said, since most now “are generally net-zero around water,” using less than a golf course or a moderately-sized neighborhood. As for fiber, “we can drag network in pretty much anywhere.”
That explains why Microsoft, which in Mount Pleasant is in the process of turning on what it labels the world’s most powerful AI data center, has backed being levied higher electric rates as a way of reassuring regulators that other ratepayers won’t be hit with costs for added electric infrastructure: The industry wants electricity fast and will pay to avoid a tussle.
Farney said he’s surprised by the opposition to data centers that’s suddenly springing up, speculating that it stems from “bad marketing” by an industry that hasn’t done enough to outline the tax base, jobs and other benefits a non-polluting industry offers communities. Still, given their hurry to get centers built, “developers will kind of put a finger on the pulse of a local community, and if there’s a lot of ant-data center sentiment, whether it’s based on truth or not, they’ll just go to a different community that wants to work.”
Taking their broadband buildout — and better speed for nearby internet users — with them.
Patrick McIlheran is executive editor at the Badger Institute.
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