Chicago industrial buildings being adapted for high-tech data centers – irony ensues!

This afternoon, I read Susan Diesenhouse’s Chicago Tribune article entitled Chicago’s old industrial base make it hot site for data centers.  Two things struck me after reading this article:

  1. It’s fantastic that Chicago is in a position to attract data center development and remain in a position to draw leading software and technology firms into what I dub “Silicon Plains”.
  2. It’s ironic that the buildings that fueled the Industrial Revolution are now being adapted for high-tech purposes.

Let’s take these one at a time.  Coming from the world of software, I foresee a future that only further moves us from the physical realm to the virtual one, with new collaboration tools making it as easy to work with the guy in the next cube as the guy a continent away.  Everything we do relies on the transmission of bits and bytes, whether we’re emailing a colleague, sending a draft document to a client, or using our web-enabled phone to check our stocks or the best restaurant for a business lunch.  As a result, any city that can make itself tech-friendly will be in a competitive position to attract businesses across virtually all sectors.  Because of what I do and my passion for the Windy City, I am elated to here that we are running into a supply shortage for data center space.  It means that we have a lot of businesses based here, taxing the *&^# out of the existing infrastructure.  Google and Microsoft both have large presences in Chicago and I don’t expect either firm to reduce its position in their personal brinksmanship.  These “anchor” data consumer/transmitters pave the way for smaller firms – partners, competitors or customers – to prefer to base their operations here as well.  Net win for Chicago.

I personally love the fact that the same buildings that once served as warehouses, distribution facilities and manufacturing centers for the titans of industry 100-150 years ago are now being repurposed to transmit data at near-light speed 24×7.  Over one century of innovation has not changed the fact that a solidly constructed brick and concrete building, located near amenities like serious power sources, communications infrastructure and water supplies, is one of the most valuable properties on the market – or not on the market, as the shortage of data center space may be implying.  675,000 SF of data center coming into the market in the next 12 months, plus Microsoft’s personal 550,000 data center mean great things for the city of Chicago AND for the office-based businesses that rely on a robust data-transmitting network.

I think the most interesting thing left out of the article was how much data center use impacts everyone in the community.  A few months ago, I had the privilege of touring one such facility near McCormick Place.  Since I can’t go into detail on who was leasing space in this data center, I can still tell you that your personal banking, internet, telephone and city services are all up and running thanks to centers like the one I toured.

For all the tenants out there, my big concern from this article is how the limited data center space is going to impact firms that don’t lease dedicated space.  I suspect that rates for shared data center space, in which a tenant leases one or more server racks to house their equipment, will climb as the space gets gobbled up.

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2 Responses

  1. what is the”silicon plains”

  2. Ah, the “Silicon Plains.” Silicon Valley in California was given that name either because of the presence of silicon in the soil or the chipmakers who set up shop ther (not sure which) and due to its topographical nature as a valley. Now it is known as an area in which many tech companies are based. Chicago, for a midwestern city, has a large number of tech companies, but no mountains or even hills of which to speak. Since it is best classified as a plains, I coined the term “Silicon Plains” for the sake of this post on data centers in Chicago.

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