Google Data Center in Malaysia; why not the Philippines?

Drew points us to a brewing discussion at Slashdot over a possible new Asian Data Center being planned by Google. Rumor is that it’s going to be Malaysia though reports indicate Japan, Taiwan, South Korea, India and Vietnam to be ideal candidates as well. Wait, why isn’t the Philippines even in the picture?

That’s where the discussions over at Slashdot was leaning forward to. And any Asian country that can grab Google’s attention and business will surely get a huge boost in their IT reputation (bragging rights if you will).

Google is pitting foreign governments against one another in a battle for a major new data center in Asia. In the past week, both the prime minister of Malaysia and economic minister of Taiwan have said their countries are leading candidates for the Google project, with Japan, South Korea, India and Vietnam also mentioned as contenders in an 18-nation site selection process. Google typically invests $600 million in each new data center. Tech companies often use multi-site searches as a tool to coax incentives out of local governments, which sweeten their offers to outbid rivals from other regions. Google’s Asian initiative appears to be taking this strategy to a new level, coaxing heads of state to invest political capital in their lust for one of Google’s mega-datacenters.

So why isn’t the Philippines even in the picture? A lot of foreign IT companies have a large segment of operations stationed here – Dell, HP, Trend Micro, Hitachi, IBM, etc. What’s another one more?

Well, anybody who’s familiar with running data centers will know that it’s not like any other offshore IT operation. Here are some of the factors I think Google would have considered in picking its ideal location for a data center:

  • Infrastructure. We’re still way behind in this arena compared to other neighboring countries. Our outgoing international fiber connections are still sparse — and our lines are even hooked up to other Asian countries like HK, Taiwan, Singapore (and there’s another one in Australia I think).
  • Government Incentives. Another aspect most foreign companies look into when doing business here — incentives in the form of tax holidays and the ones being offered in economic zones are a plus.
  • Labor. Not just the engineers. Google can well afford to fly and re-locate its best engineers to anywhere in the world. They also take into account the regular employees that will form majority of the manpower. Labor laws might also be a factor. Know why tons of companies go and open up shop in Singapore than any other country in south east Asia? Because Singapore is pro-employer rather than pro-employee.
  • Privacy Laws. Google is very sensitive about this. With the exception of China, of course. ‘Nuf said.
  • Economic Stability. Though I don’t think that in this globalized economy, this factor is as strong as it used to be.
  • Social Stability. Terrorism, rebellion, bomb attacks and the apparent incapacity of the government to curb this doesn’t hep our foreign image. It’s not what’s really happening on the ground, but how others interpret what’s going on. Being on CNN in the last couple of years with the headline mutiny, rebellion or inciting to sedition does not help either.
  • Power. I mean electricity. Running a Data Center requires enormous amounts of power. And if you look at your recent electric bill, you’ll realize you’re paying twice the amount you’ve actually consumed. In the long run, Data Centers will spend more for power than on any other operating expenses.

It would be cool to have a Google data Center in the Philippines. While dozens of international IT call centers are putting up their own buildings (PeopleSupport, Convergys, etc.) here, putting up a data center is another more complicated matter.

32 Comments on this Post

  1. Jerome,
    Not a direct comparison. A datacenter is not a fab. A fab needs an order of magnitude more cleanliness than a data center. You don’t need to wear protective clothing to work in a DC.

  2. If the recent exodus of big-name companies from the Philippines is any indication, I think these all boils down to net cost of operation. The biggest benefit of putting up a business unit in the country is lower cot of labor and stuff. Now that China and other neighboring countries such as Vietnam are as competitive, everybody’s moving there.

  3. You really think Goog and MS are worried about cost of labor?

    “Google recently confirmed that it has purchased 520 acres in Goose Creek on the South Carolina coast for a $750 million data center project.”

    Goog and MS are building their new DC’s next to hydroelectric damns. They require so much space and power and we can’t provide that. Land in the midwest is still cheap, btw.

  4. * Brownouts
    * Only La Salle has a dedicated course on natural language processing, which is what Google is about

  5. how come brazil has a data center? could you please explain why?

  6. good article, i will add my feeds.


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