It's known as "the donut," and it defines the hottest locations for data
centers serving Wall Street financial institutions. Its inner and outer
boundaries are established by criteria for disaster recovery, including the
blast radius of a nuclear attack and the limitations of real-time data
replication. Power considerations take several more big bites out of the
donut.
What's left is a ring of land in New Jersey that has become the focal point
of data center development for New York's financial industry and enterprise
companies. Many data centers in northern New Jersey are at or near
capacity, and suitable development sites in those counties are becoming
scarce.
"There is no data center space in the New York and Northeast corridor,"
said said Shally Bansal Stanley, managing director for global services at
Acumen Solutions. "It's driven a lot of companies to change how they buy
build and manage their data centers." Stanley moderated a panel on data
center real estate at DataCenterDynamics New York last week, which focused
on the challenges of finding colocation space or building data centers in
the New York market.
"Site selection is really a challenge in the New York area," said Jim
Smith, vice president of engineering at Digital Realty Trust. "The doughnut
- a 30 kilometer to 70 kilometer circle around New York - defines the space
where you can look. There's lots of sites. But finding the right
combination of location power and security is the challenge. A lot of our
processes began months in advance. We spend a lot of time driving around
with PSE&G guys looking for power."
For Digital Realty (DLR), that search has led to Piscataway and Franklin
Township, two towns bordering Rutgers University in central New Jersey. In
2006 the company bought 3 Corporate Place in Piscataway and renovated it
for data center use. Two-thirds of the space was quickly leased to Savvis
(SVVS) and AT&T. Last month Digital bought an adjacent property in
Piscataway, and signed a contract on another site in neighboring Frankin
Township, which will also be home to a Morgan Stanley data center.
The "hole" in the donut is driven by financial regulators' desire for
disaster recovery data centers that can support a same-day recovery from a
regional disaster affecting the New York area. At the time of the Sept. 11
attacks, many Wall Street firms had secondary data centers in Manhattan,
Brooklyn and Northern New Jersey. Regulators wanted to ensure that disaster
recovery centers were distant enough so that a single event on the scope of
a nuclear explosion couldn't destroy both the primary and secondary
facilities.
At one point, regulators considered setting a minimum distance for
"geographic diversity" for data centers. A sticking point was the ability
to perform real-time active-active backup, which is resricted by distance
limitations of storage networking protocols of about 100 kilometers (62
miles).
An audience member, noting Smith's mention of a 30 to 70 kilometer target
area, asked about the upper limit for financial customers. "With
active/active backup, we've seen some 100 kilometer replication, and we've
seen some 15 kilometer replication," said Smith. "The vendor community is
willing to be a lot more aggressive (on distance) than the end-user
community."
That distance limit is crucial to some business plans. The inquirer was
with Wall Street West, which is investing millions of dollars in state and
federal funding to establish eastern Pennsylvania as a destination for
backup facilities for Wall Street firms.
The group's marketing notes that its Pennsylvania sites are "located within
the 125 fiber miles necessary for the synchronous data transmission needed
by many financial services firms." The Pennsylvania cities closest to
Manhattan, Easton and East Stroudsburg, are each about 65 miles away -
about 105 kilometers.
Stanley said that not all decisions are governed by hard and fast rules.
"In some cases, the replication technology is being revisited and adjusted
to suit the location of the data center," she said.