La belle province is the new darling of the Canadian data centre industry. Driven by growing appetite for data centre services associated with the digitization of business and daily life, and fueled by demand for local delivery, global operators are setting up shop in Quebec at an impressive rate. While AWS announced this past January that it will open a new site in Montreal in the coming year, Ericsson is scheduled to open a new $1.2-billion R&D hosting facility in Vaudreuil-Dorion by the end of 2016, Microsoft launched an “operational preview” of Azure services delivered out of its new Quebec City facility last month, IBM opened a SoftLayer cloud in Drummondville last spring, and in 2013, French hosting giant OVH opened a facility with capacity for 360,000 servers.
A function of increasing market demand for cloud and other services, this fury of global investment activity may also be inspired by pent up demand. Quebec was not always so open to new data centre business: government a few years back indicated its preference for the establishment of industries that employ more workers while local service buyers continued to express favouritism towards local providers. Today, however, the provincial masters appear to have come full circle on the value of supporting the data centre industry: Investissement Québec proudly proclaims “Québec: The ideal place for your data centre.”
But new build is not restricted to the global providers. There is ample evidence of investment activity on the part of Canadian and Quebec data centre services providers as well, who are looking to capitalize on the advantages of expanding capacity – ROOT, Cogeco Data Services and Toronto-based facilities designer Urbacon, for example, are joining or have joined incumbents in the region, including Bell Canada, Canadian Colo, Videotron’s 4Degrees, CenturyLink, Telus, Cologix and iWeb. But what exactly are these advantages, and what sets Quebec apart as the “ideal place” for new data centre expansion? The experience of one local provider provides some insight into the business case for new construction, while outlining what customers can expect in turn from new, advanced capacity.
COLO-D, a provider of colocation services announced the opening of a second large, wholesale data centre in Montreal last November. COLO-D2 is a 35 MW colocation facility that resides in a 150,000 square foot building in Longueuil, which, like its sister, the 20 MW Drummondville COLO-D1, boasts carrier neutrality and connectivity to many of the major carriers via a Montreal metropolitan fibre ring that links to US and global telecom infrastructure. COLO-D believes that these links – the new facility will connect to peer sharing points at Beaver Hall, 1250 René Lévesque W, 625 R René Lévesque W and Centre Bell – offer customers the low latency connectivity needed to compete successfully in Eastern North American markets, and will be an important differentiator for the company in the evolving colo space. According to COLO-D president and CEO Patrick David, the market has shifted away from retail colocation towards global cloud providers looking for North American infrastructure and to the large enterprise segment. “Our customers are basically large companies that are offering services to other organizations,” he explained. “That’s why we have network oriented data centres with large footprints located close to the downtown core.”
On the issue of data sovereignty, an oft cited driver of domestic data centre build, COLO-D offers a mixed assessment that applies to specific verticals. Organizations such as banks or government agencies are sensitive to the need for local data residency – “it’s very real for them,” David noted – and the company has also seen interest from Asian and European customers who are concerned about housing data in US infrastructure. For other businesses, that may not store sensitive or personal data, COLO-D’s data residency capability is a less important factor.
The most compelling location factors, however, have to do with provincial attributes that can improve the operational cost equation from both financial and sustainability perspectives for energy hungry data centres and other types of industrial facilities. Quebec has a cool climate, abundant water resources (for cooling), and offers access to cheap and clean renewable hydro-electricity – key inputs to reducing the data centre’s energy footprint. According to the government, the province boasts hydroelectric capacity of roughly 43,000 MW, and hydropower accounts for 99 percent of all energy produced in Québec. In addition, the large Quebec power grid is independent from neighbouring transmission systems and “one of the most reliable and most self-supporting systems in the world,” while the Quebec landmass itself is classified as a stable geological zone.
“We work with renewable energy, which is the most important thing from an efficiency or green perspective,” David observed, “because you can have good practices and the most efficient data centre in the world, but if your source of energy is coal generation, you are creating emissions.” The price of this power is also persuasive: at approximately.45 per kwh for large power requirements, he estimates the cost of power is half what it is in nearby Ontario, where the price is .11 to .12 per kwh.
COLO-D also takes advantage of Quebec’s cool climate, using dry, free air cooling systems to reduce energy and water needs, which in turn create a “design PUE” of 1.3, which may vary, depending on customers’ IT load. “It’s always a question of balance – cooling what you need to cool,” David explained, which COLO-D manages through thermal sensing and modular deployment of precision cooling (the Liebert’s DSE DX system from Emerson Network Power) applied to blocks or modules, as opposed to chillers that cannot be so easily controlled. The facility’s DCIM system (a Siemens-based platform from Maya) provides a continuous reading of temperature and IT load in real time to provide consistent understanding of what power and cooling is needed, where in the data centre. This allows COLO-D operators to fine tune systems, but also to pass on insight – and billing tied to energy usage – to encourage the development of better efficiency strategies on the part of customers. “Customers who use 500 kw or more especially want to work this way,” David explained. “Billing is based on IT load, multiplied by the PUE… and consumption can be measured at the rack or PDU levels.”
On a global basis, the colocation industry continues to show signs of healthy growth. The most recent 451 Research data centre study (Datacenter Knowledgebase release) described 2015 as a record year for data centre, hosting and managed services sector, and the firm looks forward to continued growth over the next few years. The question is, where will this growth be? For now at least, cheap, clean power combined with state-of-the-art facilities technologies and demand for local data centre resources means Quebec is a contender….