Toomre Capital Markets LLC

Real-Time Capital Markets -- Analytics, Visualization, Event Processing, and Intelligence

Microsoft: Demand Exceeds Supply in Data Centers

At the Goldman Sachs Technology Investment Symposium in Las Vegas on Tuesday, February 27th, 2007, Microsoft's chief software architect made an interesting note about data centers. According to this MarketWatch story, Ozzie said that Microsoft will continue to invest in massive data centers, such as its $550 million center recently slated for construction in San Antonio, Texas. "There should be a recognition that demand exceeds supply with data centers, that's why we need to keep building them," Ozzie said.

This comment leads Toomre Capital Markets LLC ("TCM") to think that the market will see Google, Microsoft and Yahoo continuing to locate and build these massive data centers in places of relatively stable and low electricity cost. Those locations tend to be outside the northeastern section of the United States. TCM wonders how this trend might affect the financial world of electronic trading.

Mr. Ozzie's comment also leads TCM to wonder what Google and the others are going to do with their massive amounts of dark fiber cable. Can real-time video streams be effectively served to the Northeast financial markets from server farms located in Washington and Texas states? Or does the high data traffic of real-time video streams demand that the data centers be located in the high-density population centers? Reader thoughts and comments are welcome.