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May 27, 2009

Apple plans $1 billion 'server farm'

Posted: 11:00 AM ET

Apple appears to be planning a major upgrade to its online capabilities. Reports indicate the company is shopping around for a location to build a $1 billion server farm. This cluster of networked computers would power Apple's future Web operations.

Apple CEO Steve Jobs delivers his keynote speech at Macworld on January 9, 2007 in San Francisco.

Apple CEO Steve Jobs delivers his keynote speech at Macworld on January 9, 2007 in San Francisco.

The iTunes and the iPhone app store are certainly growing, but this massive project suggests Apple may have something new up its sleeve - or is the $1 billion price tag expected given the Apple gear that will likely be used?

Data Center Knowledge writes:

The size of the project raises interesting questions about Apple’s ambitions for its online operations. The $1 billion price tag is nearly twice the $500 to $600 million that Microsoft and Google typically invest in the enormous data centers that power their cloud computing platforms.

While the location of the data center is not yet decided, the Associated Press reports North Carolina lawmakers are salivating at the prospect of of bringing a billion dollars to their state. Legislators have proposed tax breaks for Apple that could amount to $46 million in the next decade, assuming the company reaches its $1 billion investment target within nine years:

Though the Apple site is initially expected to employ fewer than 100 full-time workers, legislators said the potential prize was so juicy it justified changing the state's corporate tax formula to benefit a single company.

Is Apple hoping to compete with Google's online cloud-computing capabilities or is a new video service like Hulu in the works? How do you think Apple will use its new online muscle?

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Filed under: Apple • computers • Google • Hulu • Internet

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LarryE   May 27th, 2009 11:22 am ET

I think it's going to be used as an online game playing/downloading service for iPhone/iPod Touch.

Mike   May 27th, 2009 12:00 pm ET

New Apple tablet running iPhone OS, plays games, HD video and Multimedia text content (news papers, text books,...), also shares apps with iPhone, needs a larger iTunes like "base" (store/customer experience) for Major push of content.

It will be good to be a content creator!

I think it will be Steve Jobs' online "Disney Land"

Joe   May 27th, 2009 1:41 pm ET

It will cost 1 billion because Apple gear always costs about 4 times what PC users pay.

Anyone using Apple products (IPhone, MacBook, etc..) obviously has a lot of disposable cash and does not mind disposing of it to Apple.

GarrettTV   May 27th, 2009 1:43 pm ET

I think this thread would end up shorter if we discussed what Apple WON'T be using this for, since they are poised to pretty much take over everything in the world. It's almost scary to think what may happen when the next generation iPhone comes out...

lostmechanic   May 27th, 2009 1:58 pm ET

A better idea would be El Centro CA with year around sun, Moderate weather and the whole system could be powered by solar panels

daren   May 27th, 2009 4:13 pm ET

How about placing server farms in cold places like New England or Canada where the cost of cooling the system will be minimal for most of the year ?

John   May 27th, 2009 5:18 pm ET

Powered by solar panels, good joke.

jimbo   May 27th, 2009 6:35 pm ET

If Apple places their server farm anywhere near the hurricane belt then they are not as intelligent as they appear. As others have already stated the farm should be placed where solar energy could be used for most of the huge power supply they will need.

What they may use it for is the big question. Maybe they will consolidate all of their network needs into one big brand new server farm.

Robert Boylin   May 27th, 2009 6:53 pm ET

An east coast location is logical for serving the major population centers. The original story mentioned a "center" with operations beyond a mere server farm. They said it as the employment would grow over time. My guess is that this project is phased in over 7 or 8 years. As Apple grows their digital distribution business with more portable products it would be logical for them to plan on servicing that growth.

Apple wants to be totally involved with your personal digital world. Any number of growth areas could feed their server capacity.

Mike   May 27th, 2009 7:22 pm ET

Rest assured that if Apple is installing Apple servers in their server farm, they're probably not paying retail for them 🙂

Andrew   May 27th, 2009 7:24 pm ET

Before the iPhone was released there was a great deal of speculation about Apple becoming its own Mobile Virtual Network Operator or MVNO.

If ATandT's exclusivity contract with the iPhone is in fact 5 years then Apple might be making a huge play to control all aspects of the iPhone.

Mike Okslong   May 27th, 2009 7:28 pm ET

Its just for back up data... They're not designed to rule the fiber-optic waves like Google.

Steven Cravis, San Francisco, CA   May 27th, 2009 7:28 pm ET

Maybe their doing something competitive with Google cloud features; gmail , docs, picasa, etc..

Steven Robertson   May 27th, 2009 7:58 pm ET

I don't know exactly what Apple has planned to do, but whatever it is, I think it will have a promising future to whatever it may be. Apple isn't known for making too many mistakes. Their biggest mistake has been... well... I can't exactly say! Probably their own CPU's from the 90's, but they switched to Intel chips, and when that happened, Apple boomed, and then came the iPods, the better laptops (which I think between Apple and Dell, they have paved the way that made the laptop what it is today) and they even have cell phones. Whatever Apple has planned, i am sure it is the right step towards something big.

J Wigz   May 27th, 2009 10:17 pm ET

Actually Joe considering the warranty that mac provides and the fact that macs hardly get viruses, its cheaper in the long run to purchase 1 mac then 2 PC's

Constable Odo   May 28th, 2009 12:05 am ET

Apple seems just about ready to take a big dump on Microsoft. Anything you want from the cloud at your fingertips. With every purchase of an iPhone or iPod Touch you get 10 GBs of free online storage for the life of the product. I had heard that Apple had considered building some new search engine. Surely they wouldn't be thinking of challenging Google. However, nobody has heard of any search-tech people heading for Apple.

I'm hoping this server farm will be used for something like RIM's BES solution and offered to serve all the largest corporations in the U.S.

I can't wait to see that darn tablet device in action.

srichey   May 28th, 2009 1:12 am ET

Wow, they are actually locating the server farm in the United States? Why not India or China?

Jim Manico   May 28th, 2009 2:07 am ET

Is Apple going to wait for Windows 7 Server OS or go right for Vista?

Billy   May 28th, 2009 6:05 am ET

Could the farm be populated with SSDs for reliability and energy saving?

Mark   May 28th, 2009 7:37 am ET

"Blah, blah," Marketing hype, "Blah, Blah." The best thing Apple does is draw attention, and that's certainly what the price tag is doing regardless of the end goal. (Also, I can't help but point out that any arguments about cost of ownership are invalid since they are based on the individuals skill level as well. I've built all my Desktop PCs for far less than any company, big or small, and certainly beat any Apple price for proprietary gear.)

Tony   May 28th, 2009 7:56 am ET

It will be a lights out data center in the middle of Nebraska with all the operations support coming from India...

Scott   May 28th, 2009 10:17 am ET

imagine if you no longer had an actual operating system on your pc or laptop and you are connecting to a server where all your data is backed up on which you pay for no time capsule needed the future is here and its coming fast

Mark   May 28th, 2009 10:51 am ET

I am guessing since Apple does a lot with media it will be similar to youtube, Hulu, and a iTunes store. Basically a big media dispersal center where you can watch movies, TV from portable devices or home media centers. Pretty much everything they make is connected to music or video in some way.

Volvo D   May 28th, 2009 12:39 pm ET

I hear the whole purpose of this server farm is to backup Steve Jobs Brain and emulate him inside vast number of computer before he passes away.

Steve will be with us forever. It will be called iSteve or iJobs app for iPhone.

Scott   May 28th, 2009 12:46 pm ET

Hello – push email a la blackberry – duh!

Mark Davis   May 28th, 2009 2:40 pm ET

Whatever it is it will be bigger and better than anything revolving around Microsoft. I think that Apple is about to take another leap that is light years ahead of anything in the PC world.

Robert   May 28th, 2009 3:28 pm ET

Why put it in one location if its going to be pushing massive data is my question? That size of a price tag we are talking about a huge data center. Lets break it up into 2 or 3 data centers. Spread the data centers across the country to provide a better solution of whatever they have planned.

Spreading the data centers across the country would provide so many benefits in so many areas of computing.

Brian   May 28th, 2009 4:43 pm ET

The Carolinas don't get many hurricanes so the above comment about having a server farm near the "hurricane belt" is unjustified. Why people open their mouths before they speak is beyond me.

bla bla bla   May 28th, 2009 5:51 pm ET

they are creating the worlds largest porn server. porn straight to your iphone and ipod touch!!!!

Jeremy   May 28th, 2009 6:19 pm ET

The potential prize is so juicy? It's not worth it for North Carolina to change its tax code and give 46 million in tax breaks for a wealthy company's project that will provide fewer than 100 jobs.

Even with a multiplier, suppliers of suppliers and so on to feed the server farm, Apple will not bring in more than 46 million in tax revenue to the state in extra corporate taxes, sales taxes or income taxes from this operation over ten years. If the state is that desperate to provide a few jobs, then it can hire 100 people at 46K apiece for ten years and let that trickle through the economy. That's cheaper than what they want to do. No state should be subsidizing superwealthy Apple.

Jeffery.h   May 29th, 2009 3:53 am ET

Obviously it is for the new NO PC computers. All data is streamed from central servers, all processing takes place their.

it is a big deal in developing future games and gaming systems. As people will just need to pay for access, not any hardware beyond monitor and input devices.

I see the Future   May 29th, 2009 4:52 pm ET

It for the WEB 3.0 and Apple will own it while everybody else is still trying to figure out WEB 2.0

Jeff   May 30th, 2009 4:52 pm ET

I believe Apple is preparing to take over the both electronic books and the entertainment media business. (eMagazines) With the release of the 8" x 10" ipod touch, the entire media business is going to change. Fully integrated /interactive editorial and advertising. This will change everything.

JC   June 3rd, 2009 4:41 pm ET

I'm in the data center biz, and frankly, I doubt Apple knows exactly what will populate the entire data center. As the story from DCK mentions, this building will be built out in phases, over ten years. A typical enterprise level data center takes 12-18 months to build and commission – before a single server is installed. 1 billion dollar data center? Not quite as big as what you'd think – at 1200/sq ft to build, that suggests 830k sqft – and doesn't factor in the cost of the server. Or any site development. Or the cost of bringing any communications or power to the site. Trust me, 1,000,000,000 can go pretty quick. 500,000 sqft data center? Not out of the realm of current possibility.

Though of course, these are wild guesses, at best.

Mike   June 10th, 2009 6:37 pm ET

Revolutionize Computers
Revolutionize Software and OS
Revolutionize the music Industry and the way you listen to music
Revolutionize What the cell Phone once was and what it Should be

Next For Apple
-Develop A Internet Ready Sync Chip
-Build a state of the Art system that will act as WEB 3.0 Cloud- Plus Internet Services to Connect to those new Developed Chips
-Implement the newly created Internet System by installing Sync Chips in Every Iphone, Apple Computer, Ipod touch
-Consumers who Purchase a Apple Computer will then have the Option of Activating the Chip With Apples service for the strongest most reliable Internet Connection anywhere, All the time
-Apple will Cut Ties with all Standard Mobile Carries, you will purchase your Iphone (Ipod touch activate the chip and have internet) Iphone users will also have to choose Apples VOIP service with said data plan to use the Phone
– Apple will release I-Phome (Not a spell Error the I-Phome) It will be a deluxe version of the IPhone for your Home or Business it will have Apples Home VOIP and run off a Internet connection just like the other devices.
-Apple will Provide chips for other Computer companies

Maybe I am just dreaming but I really think this is the Future and if anyone can make it happen it is Apple com'on what is left for them to do? They will continue to focus on software and better hardware of course but Apple proves they are a company that loves to push restraints as far back as they can for their success at the same time have no problem enforcing restraints. Apple don't want to get bogged down with their products by dealing with AT&T,or other crappy companies with their products, Apple Used MS when Jobs returned to the Company and then Lashed out to prove it was a monster of its own it will be a matter of time Maybe 15 years or maybe 5 Before Apple Breaks through and shows what kinda of monster they really Are. Hey Apple if you read this and Need some Ideas I am your man and I do believe you will someday rule the World Alongside Google Hell you both maybe under one roof by then.

Pete Lundin   August 4th, 2010 9:52 am ET

With that amount of server power running, I hope Apple considers energy saving and environmental issues a top priority. Siting is definitely one of the most important factors that affect the energy consumption and environmental effects of a server farm. There are places with cooler climates than in the continental US and with more green electricity available. I would recommend anybody considering siting a datacenter to take a look at the Finnish website on these issues:

gwats   August 4th, 2010 11:38 pm ET

I'm really getting sick of the "Apple gear is 4X more expensive" lie. Apple gear is little more expensive up front, it more than pays for itself in longevity and ease of use. My current G5 towers have been out of production for a few years now, But they burn DVDs, surf the net and sync with my iPhone, my MacBook, and can handle every bit of my 21mbs speed coming off my Comcast cable modem. NO Mac I own has ever been hacked or rendered useless due to a viral attack.
Guys.... you get what you pay for and the basic PC looks pretty naked next to an iMac or a Mac Mini.
The 'Mac is expensive' lie is for those too cheap to pay for what they really want UP FRONT. I bet you this systemic 'cheapness' is evident in OTHER parts of their life, too! 🙂   April 18th, 2011 10:14 am ET

Apple plans 1 billion server farm.. Smashing 🙂

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Ginette   May 4th, 2017 12:33 am ET

If Apple were to build its conceptual server farm in the state, it would have to spend the $1 billion within 9 years to be eligible for the discount.

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