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IBM's $80 million bet on cloud computing opens in Auckland

PLUS: That secret location in full.

Chris Keall
Fri, 27 May 2011

Is cloud computing hype or reality? 

IBM is taking an $80 million punt on the latter.

The company's new Auckland data centre was officially opened last night by Australasia chief executive Andrew Stevens and New Zealand country manager Jennifer Moxon (see NBR's detailed preview below). A second centre of equal size is on the drawing board, with vacant land waiting.

Expect more ribbon-cutting. HP and Fujitsu have server farms of similar scale in the works; a clear sign that cloud computing and other managed services are moving from hype to reality.

Mr Stevens would not name any anchor clients. But as NBR has previously reported, NZ Post's Localist directory service will be one of the Auckland centre's clients. And it's also a certainty that the new facility played a central role in IBM's successful bid to extend its core contract following a Gen-i incursion (the Telecom division is on its own cloud push, utilising phone exchange systems).

The chief executive said that while the after-effects of the global financial crisis are still being felt in some areas, spending was picking up in some areas - notably financial services, and companies of descriptions that were re-engineering their business model to talke advantage of social media, and the attendant opportunities to relate more directly with customers, and partners.

Secret location
The location of IBM's new data centre is secret, and the building unbadged - though some might recognise the building next door as the local office of Schneider Electric, the French company that was one of IBM's construction partners (American Power Conversion gear features among the data centres many backup facilities; APC was bought by Schneider in 2007).

Separately, MacLean Computing's Chris MacLean said his company had become an official managed services provider for IBM Virtual Server Services (VSS) in the mid-market (businesses with up to 500 users). Customers of the new service have their data and applications hosted on virtual machines at IBM’s new Auckland data centre.

IBM's East Tamaki Datacentre: the big numbers

  • 1500m² raised floor area has capacity for about 720 racks
  • Total facility size: 5200m²
  • 26km of mains cables plus sub circuit
  • 54 tonnes of switchboard requiring 100,000 man hours to produce
  • 25 tonnes of copper in the switchboards
  • 1.4km of air conditioning pipe work
  • Four back-up generators, providing enough power to supply 266 homes
  • Twin fuel tanks, holding a total 30,000 litres of petrol, or enough to run the centre for around three days after a power cut
  • Cost: $80 million

IBM names broadband partners for giant Auckland datacentre

Februrary 9 IBM has named Telecom, TelstraClear and Vector as its broadband for its giant new Auckland data centre, to be opened by the prime minister on March 2.

Big Blue has provided each company with ducts running into the $80 million centre, and it will be up to each of the three to run in their own fibre, and decide on capacity.

NBR recently toured the massive data centre, which is located in a “blind” (that is, unmarked) facility in Auckland’s light industrial suburb of East Tamaki (hint: it’s in site of the old Fisher family stud farm).

At the centre of the facility is a 1500 square metre floor with capacity for 720 server racks (when NBR visited Friday, it was still bare).

The main floor is surrounded by multiple, state-of-the-art backup, cooling, dehumidification and security systems that take the total size of the building to 5200 square metres.

The data centre will be a 100% managed services site, the company told NBR.

That means while IBM naturally has a preference for its own hardware, customers will be have gear from other vendors like Dell, EMC or HP hosted by the centre – but once it’s in the facility, it will be all run by IBM.

The new IBM data centre will compete with other another new(ish) kid on the data centre block: Datacom’s $35 million, 700-rack facility on Auckland’s North Shore (which has failover ot the company's older 2300-rack Wellington data centre), plus Telecom’s push to convert exchanges into double-duty cloud centres - an initiative which (with help from a Big Blue fumble) has helped Telecom’s Gen-i division peel some of Air New Zealand’s data centre floorspace business from IBM. 

The promise of the East Tamaki centre helped IBM stage a comeback with Air New Zealand, recently extending its core contract with the airline (although NBR understands that sharpened pricing helped, too).

IBM is figuring on more growth. The new data centre’s $80 million East Tamaki site has enough spare land for a second 5000sqm facility to be built immediately behind the first. With cloud computing, outsourcing and online services of all types driving a server-farm boom world-wide, it seems a safe bet – but the timetable will depend on customer demand.

Chris Keall
Fri, 27 May 2011
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IBM's $80 million bet on cloud computing opens in Auckland