The data center is sited in Luleå on the northern Swedish coast, and it went live on Wednesday. As with Google’s new Finnish data center, Facebook is counting on the northern European environment to help cut cooling costs – not by way of seawater cooling, this time, but using good old cold air. The remaining excess heat is used to keep the associated offices warm.

According to a post on Wednesday, water is nonetheless providing hydroelectric energy for the operation. This accounts for all of the data center’s electricity needs, and the post states that “the supply is also so reliable that we have been able to reduce the number of backup generators required at the site by more than 70 percent.”

The Luleå facility is almost entirely based on Facebook’s Open Compute Project designs, which also help on the energy efficiency front by doing away with extraneous materials. The company reckons the data center averages 1.07 on the power usage efficiency (PUE) scale.

Having a data center in Europe is a very good idea when it comes to meeting European data protection laws (which are probably about to get tougher). The only reason Facebook can legally process EU citizens’ personal data in the U.S. is its membership of the U.S-EU Safe Harbor program — after Edward Snowden’s leak, that arrangement now looks shaky to say the least.

It’s hard to say what the fallout from the scandal will be just yet, but processing those citizens’ data within EU borders may help Facebook stay on the right side of the law.

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So what makes Dresden-based AoTerra such hot property? The fact that it does just that: heats properties. And these are no ordinary heaters. These are heating systems with servers inside them.

AoTerra’s system comprises a server unit connected to a heat exchanger or heat pump, which is in turn connected to the property’s ventilation system, and a hot water tank. It’s intended for new-build and renovated properties that meet modern energy efficiency standards and, according to the company, efficiency is nearly 100 percent (the company also only uses “green” energy for its devices).

Each system has a broadband connection and forms part of a distributed, OpenStack-based data center. The result is AoCloud, which offers compute, block storage and object storage (all are currently in beta). Customers can be pretty sure their cloud is as green as it gets, but there are other benefits too – the distributed nature of the cloud could mean low latency, and AoTerra is touting security as a plus, too.

AoTerra is also involved with a couple of Europe-funded projects, namely LEADS (trying to create a “data-as-a-service” model on top of geographically distributed micro-clouds) and ParaDIME (trying to making computing more energy-efficient).

This isn’t the first time we’ve seen the idea of using waste heat from data centers to heat homes — London’s Telehouse West data center was going to do that, although the local council never set up the distribution network and the housing development never got built due to the recession. Telus is planning something similar in Vancouver. But those were about data centers heating nearby developments; what AoTerra has come up with is a step beyond.

Property owners or developers pay €12,000 for the system (about the same as a normal heating system), but they don’t have any ongoing operating costs – from that point on, they get free heating and hot water. And AoTerra gets out of having to pay for air conditioning, which is a pretty major chunk of the cost of running a traditional data center.

Overall, AoTerra claims, its distributed data center costs the company about a tenth of the normal set-up costs for a data center, with its running costs being less than half and CO2 emissions around a third. The company has only been going for a year, and it already has 20 AoHeat devices with over 200 servers installed. It had a turnover last year of €100,000, and has already signed contracts worth €400,000 this year.

AoTerra says it’s negotiating €1.6 million worth of contracts at the moment, and has another €3.1 million worth in the pipeline. This year it wants to sell 100 AoHeat devices, and next year 500 – at that point, it would be one of Germany’s biggest cloud providers. They need the crowdfunding investment to grow the team to match demand, they say.

I’ve yet to see one of these units in action, but the pitch is intriguing to say the least.

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The company has come under criticism for not having a European data center in the past, largely due to compliance issues – Salesforce is part of the EU-U.S. Safe Harbor framework, which means it’s allowed to handle European citizens’ personal data, but many customers would prefer the certainty that a locally sited data center allows. (We will be discussing such issues at our Structure:Europe conference in London on 18-19 September, by the way.)

Salesforce said last year that it hoped to open a data center in the UK in 2013, but this appears to have been pushed back a little now. According to a statement today, the new data center – the firm’s sixth — will be completed in 2014 in partnership with NTT Communications’ local arm, NTT Europe.

In a statement, Salesforce CEO Marc Benioff said Europe had provided the greatest revenue growth – 38 percent — for the company in the 2013 fiscal year:

“We are doubling down on Europe with the announcement of our new data centre in the UK, which will support continued customer success in EMEA.”

Robin Balen, NTT Europe’s wholesale data center business chief, added that the new facility would be “powered 100 percent by renewable energy sources.”

Innovation Challenge

Meanwhile, Salesforce has also teamed up with a group of European venture capital firms – Notion capital, Octopus Investment and MMC Ventures – to launch a €5 million ($6.6 million) Innovation Challenge for startups.

Startups are invited to pitch their enterprise cloud apps that could run (surprise!) on Salesforce’s platform. There will be pitching events through Europe between September and November, and the winners will get seed funding. Apps will need to be at least in the beta stage, with demonstrable “traction, customer success and user adoption.”

“This is a unique opportunity for innovative start-ups in the enterprise app market here in Europe to receive commercial support to allow them to compete on a global stage,” Octopus principal Luke Hakes said in a statement.

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Google bought an old paper mill in Hamina several years ago, and converted it into a data center that is, interestingly, cooled by seawater. Now, the company is extending the facility at a cost of €150 million ($196 million) — design nerds should note that this is being done by converting a machine hall originally designed by the architect Alvar Aalto. And now Google has also struck a deal with Aalto University and regional development agency Cursor.

According to a Google blog post, Google’s backing will allow Aalto University to better support local startup accelerators, and help “improve the use of the internet” by small businesses in the region. The university is already a backer of the Startup Sauna program and various other entrepreneurial initiatives, so we can now expect to see more in this vein.

Google’s push is supposed to “show the way from our industrial past to our digital future,” according to the post, and indeed both the Belgian and Finnish data centers are sited in areas left somewhat depressed after the death of older industries – mining in the case of the St Ghislain facility and paper milling in the case of Hamina.

It’s good PR for Google, of course, but there is validity to the conceit — and it’s also quite a clever way to keep an eye on  ideas that local developers and engineers are coming up with.

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But the servers, storage and networking gear inside the millions of square footage that Facebook has dedicated to data centers are where the bits that comprise Facebook’s online products are assembled. Every click, every upload and every message sent via the web passes through a data center somewhere.

An economy built on digital bits

And the relationships are getting more complicated with the rise of cloud computing and federated applications comprised of multiple services wrapped up in one program. So a data visualization service that ties your company’s Salesforce data with internal business data relies on servers hosted by Salesforce, possibly located in-house or, if the data visualization app is using Amazon as its back end, one of Amazon’s data centers.

Facebook data center in Prineville, Ore.

This is no longer a call-and-response approach, where I call up a web site and a server sends it to me. And the value of those services is increasing in line with their complexity. Intel’s purchase of Mashery last week, for example, was evidence of the chip giant realizing that this web of relationships is the new digital supply chain. And the ports of call are the data centers, as Mark Thiele an EVP of technology at Switch, told me.

So what does this have to do with Facebook? Or Google? In many ways they have pioneered the creation of a new model of data center and computing, where the data center is the computer. They did this because when offering a web-based service, their cost of goods was directly tied to their infrastructure. Knowing how much it costs servers to perform and deliver each search result is as important for Google as knowing what the cost of gas is for an airline.

And yet… for the most part, how we discuss and think about data centers has not become more sophisticated beyond saying it’s a room full of servers. Yes, we have data such as power usage effectiveness ratios, but that’s not the most important metric for everyone. If data centers really are going to be the manufacturing floor of the digital economy, we need to start thinking about them at a higher level.

Fortunately, some people already are. Here are two places we can start: understanding the operators and defining the metrics associated with success.

Understanding the market

All data centers are not equal. For years people have broken down data centers based on their redundancy and security, with a Tier-1 class of data center defined as a high-availability data center that has lots of redundancy and secured premises. This is where you host your financial information and NSA files, and it’s also the most expensive to build.

But there’s another breakdown worth exploring. Just like there are different types of computing out there requiring different gear and performance, there are also different types of data centers. I’ve broken it down into three categories, but I am on the fence if there should instead be four.

• Master of their domain: This includes Google, Facebook and even enterprise customers. These operators control the hardware, the building and the apps running on the hardware so they can optimize the heck out of their infrastructure. Facebook and Google are the best known for doing this, but there’s no reason anyone who has the ability to control everything at a big enough scale can’t learn from Facebook and apply its techniques to their corporate operations. In the case of banks looking at Open Compute, this is already happening.
• Master of their servers: This includes most hosting companies, like Peer1, Rackspace and others, who can build out their own hardware and servers but can’t control what people run on them. I’m struggling a little with this category because I’m not sure if Amazon Web Services or Microsoft Azure fits into this category, because they don’t control the end applications. However, they are able to limit the services they offer in such a way that their infrastructure is optimized for them, putting them on similar footing as the masters of their domain.
• Masters of their cages: Companies such as Equinix, Switch and Digital Reality Trust that operate co-location space fall into the last category. These companies operate huge data centers that are like server hotels. People lease space, buy connectivity and pop their own gear into the space. They tend to offer customers multiple providers for connectivity or easy interconnects to other data centers. For example, Equinix has a program where it can offer a direct connection to AWS. This cuts the distance digital goods have to travel and can also offer some additional guarantees.

Defining the metrics for success

Once you break out the different builders of data centers, it’s possible to try to figure out the right metrics associated with how they run their data centers. David O’Hara, a GigaOM Research Analyst and consultant in the data center space, breaks this down into three sections:

• Capital expenditures: How much does this data center costs to build a data center, per megawatt?
• Operational expenditures: How much does it it cost me to run the data center, per megawatt?
• Availability and redundancy: What is the availability in the data center in terms of networking, power and cooling?

He suggested companies start thinking of data centers as a portfolio that should match the value and needs of the services they are trying to run. For example, he pointed to Apple’s data center in Maiden, N.C. as a beautiful, state-of-the-art data center with high reliability. However, building such data centers is expensive, so a service that doesn’t need high availability doesn’t need to be hosted there. So showing someone a trailer for an iTunes movie might be better off served fromm a less reliable data center while transaction processing should occur in Maiden.

A company that is way ahead of the pack on this front is eBay, which has broken down its applications into specific workloads and assigned values to them to develop its miles per gallon or MPG for data centers. While the rest of the industry is obsessing over power usage effectiveness ratios (which matter to the companies operating their own data centers for cost reasons), eBay is tracking code, servers and overall infrastructure efficiency related to transactions (specifically URL requests) associated with users’ buying and selling on the site.

So if Facebook is prepping to spent 30 percent of last year’s revenue on a new data center in Altoona, as the Iowa legislators maintain (Facebook didn’t return my request for comment), let’s start talking about data centers not just as a room full of servers, but as the manufacturing floor for the digital economy. To do that, we need to develop a better understanding of the different operators, the right metrics for each business and start collecting more data on them overall.

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Lobby at Verizon office at 140 West Street, New York post-Sandy

According to a new survey for data center service provider Digital Realty Trust, 65 percent of the 148 companies surveyed that definitely plan to expand their data centers want to do so in New York City or its environs. This flies in the face of speculation that big New York companies would put more of their new data center firepower far from the coast. (GigaOM’s Jordan Novet has more on the research here.)

Financial services companies and exchanges clustered in New York obviously need some compute power nearby to reduce latency on trades, but data center experts said those capabilities could be parcelled out judiciously to local data centers while most of the other heavy lifting could be shipped off to facilities far from the coastal flood plain.

According to the new research:

“The majority of respondents who definitely plan to expand in 2013 would prefer to locate a new or expanded data center in New York City (65%); Los Angeles (47%), Dallas (36%), Chicago (31%), San Francisco (30%) and Phoenix (28%) are other U.S. cities mentioned often.”

Other highlights:

• Security was cited as the most important factor on decisions about location.
• Folks tend to opt for a site close to their current work location. 69 percent choose their home city as one of their expanded data center locations.

Of course, when two 100-year storms hit the same area within two years of each other, you might start evaluating new locations and then the question becomes what areas are not susceptible to natural disasters. But, as Chris Perretta, CIO and EVP of State Street told GigaOM last year: ”In the Midwest you get tornadoes, on the coast you get surge, in Florida you get hurricanes, in the west you get wild fires, in California you get earthquakes.” Finding safe harbor is not easy.

Given that, maybe these findings are not such a surprise after all.

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My first guess was that Houston has a lot of data center space, but data from Telegeography shows the city has roughly 400,000 square feet of retail co-location space in the entire metropolitan area, which is a far cry from the 3 million square feet the San Francisco Bay area has, or even the 1 million that Austin, Texas has. So now, I’m frankly stumped.

Houston is home to 50,598 of the top million sites (as measured by Alexa), and it’s followed by Mountain View Calif. at No. 2 and Dallas at No. 3. In total, those million websites are hosted in almost 8,000 cities — 7,936 to be exact, so it’s possible that there’s one near you. But, as the chart below shows almost a quarter of the web’s sites are located in the top 10 cities.

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“I don’t want to say this, but … we are panicking a bit,” said Colette Maloney, head of European Commission’s smart cities and sustainability unit, during the Green Grid Forum in Santa Clara, Calif., on Wednesday. “We are way off target.” The commission aims to see its member countries cut their energy use by 20 percent — compared to the 2005 levels — by 2020, and the European Union has only hit a 13 percent reduction.

To meet its 2020 target, the commission is counting on the information and communication technology industry to do its part, and is focusing attention on data centers in particular, given that data centers account for about 25 to 30 percent of the energy use by the IT industry, Maloney said.

CTO, Verne Global, Tate Cantrell and Eirikur Hrafnsson, Founder GreenQloud at Structure Europe 2012

Not only that, the number of data centers will likely mushroom if the idea of “smart cities” becomes a reality. The term is really about the use of technology to help people use and manage resources – from water and power to transportation and communication systems – much more efficiently (see  this GigaOm Pro report, subscription required, called “Key technologies for the future of the smart city”). Using sensors to collect data and computers to analyze and disseminate them will be a big part of running a smart city, and that will require the construction of more data centers.

Figuring out how to measure and analyze energy savings and what data is acceptable to use for those calculations are among the big challenges for making data centers more efficient, Maloney said. And getting at least the majority of the IT industry to agree to a set of methods and data won’t be easy. The commission has been working with many companies and trade associations, but they haven’t reached a happy compromise yet. Implementing those standards once they are set will pose a new challenge, she noted.

Some of the standard-setting industry organizations are looking to adopt rules for promoting energy savings. The Green Grid, an IT industry association, came up with PUE (Power Usage Effectiveness) to gauge the energy efficiency of data centers. Companies such as Google have promoted the use of PUE, which has some notable limitations.­­ EBay has a new metric for the MPG of a data center, too.

Maloney said PUE is useful, but the commission is looking at other metrics as well, especially since it wants to promote new business opportunities while achieving its energy savings target. Some of the opportunities it hopes to promote will involve making and selling efficient equipment and related services, but what constitutes green products and services has yet to be clearly defined.

In the mean time, the commission is funding research projects, such as Fit4Green and All4Green, that will come up with new ways to run data centers more efficiently. Later this year, the commission plans to call for research proposals on building and running green data centers in smart cities, Maloney said.

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