Thinking Hyperscale: QTS Positions Richmond as Cloud Campus

May 10, 2017
As large hyperscale leases drive the growth of cloud campuses, QTS Data Centers sees an emerging hyperscale opportunity in its huge Richmond data center, a massive former semiconductor fab.

SANDSTON, Va. – In the spring of 2010, almost no one was thinking about 1 million square foot data center properties. But QTS was.

Here in the suburbs of Richmond, Virginia, it found a unique opportunity: a massive former semiconductor fabrication plant, with power and cooling infrastructure in place. The 210-acre site came with 1.3 million square feet of existing facilities, and was available for $12 million.

Fast forward seven years. Facebook has just announced plans for a 1 million square foot data center building in Iowa. It’s not the first, since Switch has already built a 1.3 million square foot colocation facility at its Citadel Campus in Reno. The rapid growth of cloud computing has spurred a building boom for hyperscale data centers that can house hundreds of thousands of servers.

That’s why, as Brian Johnston walks the halls of the QTS Richmond facility, he believes its hyperscale moment has arrived.

“This site is ideal for hyperscale,” said Brian Johnston, the Chief Technology Office for QTS. “There’s massive scale and infrastructure, and this site can be expanded quickly.”

Virginia a Hyperscale Haven

Given its size, the QTS Richmond facility might seem an obvious candidate for large wholesale data center deals, in which customers lease turnkey suites of finished data center space. One challenge has been Richmond’s proximity to the world’s largest market for hyperscale colocation in Ashburn in Northern Virginia. Virtually all wholesale offerings on the East Coast must compete with the critical mass of providers and space concentrated in Ashburn.

QTS says in the past year, three factors have boosted Richmond’s attractiveness to hyperscale data centers:

  • A land grab in Ashburn has reduced the supply of development sites, pushing the cost of data center sites as high as $1 million per acre.
  • The development of an undersea cable landing station in Virginia Beach will route a huge volume of international data traffic through the Richmond area.
  • The Henrico County Board of Supervisors recently reduced the business property tax rate on computers and data center equipment from $3.50 per $100 of assessed value to $0.40 per $100, making the Richmond area more competitive.

“All of these elements are coming together for Richmond,” said Johnston. “Virginia is a very popular data center state. In Ashburn, space is running out and the cost is going up. Henrico is trying to position itself as an alternative. With the amount of money data center customers spend on equipment, that tax break is meaningful.”

Optimized for Hyperscale

There are 100 customers in the Richmond site, where QTS has filled 90 percent of the space in its first data center building. As it began developing the second building, QTS optimized its approach for hyperscale tenants, rather than the government and commercial customers that helped populate its first phase.

The 85,000 square foot powered shell space on the first floor of Data Center 2 at QTS Data Centers’ Richmond campus. (Photo: Rich Miller)

QTS has had success with hyperscale customers in other markets, especially in Dallas, where a single tenant leased eight megawatts (MW) of space last year. That’s an exceptionally large lease by pre-2016 standards, when the largest leases were 10 to 12 megawatts at a time. That changed dramatically in 2016, with providers taking down as much as 35 megawatts of space, and the top five deals all exceeded 16 MW. That leasing was driven by cloud service providers like Amazon, Microsoft, Oracle, Salesforce and IBM/SoftLayer.

The common theme in these deals is that they want lots of data center space, and they want it yesterday. Speed-to-market has been the deciding factor in many of the largest deals, boosting the fortunes of providers who can build quickly (most notably CyrusOne) or have large footprints available (such as DuPont Fabros, Digital Realty and RagingWire).

QTS had built its two-story Data Center 2 to suit these hyperscale requirements. The second floor is currently 85,000 square feet of powered shell space, ready for a company that deploys its data center capacity on a slab floor.

The first floor features a finished data hall, with four-foot raised floors and containment systems already in place, including overhead hot aisle chimneys and aisle end doors, all ready to accept racks. The large data hall offers 6 MW of space, but can be subdivided into 2 MW halls. Cooling is provided by CRAC (computer room air conditioning) systems around the perimeter of the hall, which cools air as it returns from the ceiling plenum, and delivers it under the raised floor.

The turn-key data center space at the QTS Data Centers’ campus in Richmond, with raised floord

Each data room has an adjacent loading dock and lift, which is ideal for pre-configured racks of servers on casters, which can be rolled in and installed in the data center – once they’ve visited the nearby “burn-in” rooms where racks can be tested prior to deployment.

“It goes back to understanding the customer and what they want,” said Johnston. “The hyperscale market wants speed. ”

He said there are two types of hyperscale buyers, with some seeking space for an “availability zone” to provide geographic diversity, and others looking for raw economics to build significant capacity. “When you’re looking for raw economics, you’ll get a lower cost product down here,” said Johnston.

Availability zones were developed by Amazon Web Services to provide customers with the option to mirror or back up key IT assets to avoid downtime. Each of the AWS cloud regions contain multiple availability zones, providing failover options in the event a single data center experiences an outage.

Infrastructure-Rich Retrofits

When QTS Data Centers began scouting the Richmond site in 2010, it was expecting that data centers would be larger in the future. QTS has become a leading proponent of the Internet-scale retrofit, finding former industrial facilities with sturdy infrastructure and transforming them into massive data centers.

QTS founder, chairman and CEO Chad Williams says the ability to identify and acquire these “mega-scale” properties at a low cost basis is one of QTS Realty’s key differentiators. It has pursued this strategy with massive buildings in Atlanta (former Sears distribution center), Dallas (former Maxim semiconductor fab) and Chicago (former Chicago Sun-Times printing plant). It has also acquired large but underutilized data centers from McGraw Hill (Princeton, N.J.), DuPont Fabros (Piscataway, N.J.) and Health Care Service Corporation (Fort Worth, Texas).

Cooling towers in the equipment yard of the QTS Data Centers facility in Sandston, Va. near Richmond. (Photo: Rich Miller)

The Richmond campus provides a unique canvas for QTS to implement its mega-scale playbook. The huge facility was built by Qimonda AG, one of the largest global supplers of DRAM memory chips for computers and graphics. Qimonda filed for bankruptcy protection in 2009, shutting down the plant and laying off 1,500 workers. QTS bought the property out of bankruptcy court for $12 million.

Kevin Snead managed the property for Qimonda, and continues as Site Director for QTS, where his knowledge of the existing infrastructure has been a key benefit in the retrofit. This is visible as Snead brings visitors through a hallway at the rear of Data Center 1, which provides a view of the 110 megawatt substation from Dominion Virginia Power and the chiller plant and cooling towers that were built for Qimonda. QTS has filled one equipment yard with 10 Caterpillar 2.5 MW diesel generators, and created a second yard with space for more generator capacity.

A battery room inside the QTS Richmond data center. (Photo: Rich Miller)

The size of the 210-acre property supports advanced security features. The central part of the campus is surrounded by a K12 rated security fence, designed to stop a 15,000 pound vehicle traveling at 50 miles an hour. The only entry is through a central security screening facility, equipped with metal detectors and x-ray machines for bags. There is a 500-foot setback between the security center and the main office building, where visitors enter through a “mantrap” corridor with security doors at each end.

Access to different areas of the campus are controlled by security doors using both keycode and biometric access control. There are two areas of the facility that meet the SCIF (Sensitive Compartmented Information Facility) standards for national security clients.

Data Halls With A History

The halls and lobbies of the office areas are lined with art by painter Steve Penley, who is known for his colorful, expressionist renderings of American symbols and historic figures. The data halls in the Richmond facility all have names drawn from Civil War battles. There are data halls named for Bull Run, Shiloh, Harpers Ferry, Cold Harbor, Old Church and Petersburg, each with plaques outside the entrances explaining the history behind the room’s designation.

QTS began its retrofit of the site in a former manufacturing facility, which became Data Center 1. This section of the building allowed the quickest deployment of data halls. “Fabs take a little more time (to retrofit) and there’s more work involved,” said Snead.

Conduit for power cabling lines the walls and upper areas of the power rooms in the QTS Data Centers’ facility in Richmond. (Photo: Rich Miller)

The former clean rooms are on either side of Data Center 1. An enclosed bridge between the buildings featured the perforated tiles that once covered the clean rooms. Data Center 2 was previously a 200mm fabrication facility, and has now been converted for hyperscale users. A third building, a former 300mm fab, is reserved for Data Center 3.

QTS has runway for additional expansion once it fills these data centers. The site has 110 acres of land to support additional data centers, and can accommodate a second 110 MW substation. The site supports a total buildout of 1.5 million square feet of data center space.

Johnston believes the Richmond site can make QTS a player in the hyperscale super-wholesale deals that can gobble up these large chunks of data center real estate. The Virginia Beach cable landing will be the arrival point for trans-Atlantic cables whose ownership includes Microsoft and Facebook. It is among the sites benefiting from the growing interest in cable landing stations as magnets for data center customers.

There’s also the new tax advantages. “Henrico County’s value proposition just became much more valuable to the data center sector,” said Gary McLaren, Henrico County Economic Development Authority Executive Director. “This property tax incentive is great news for our existing data centers and ultimately for new data center projects that choose to capitalize on sites such as White Oak Technology Park, where we offer robust electric, fiber, water and sewer infrastructure.”

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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