The cloud, explained: where your data really goes

The rise of the internet has unlocked a vast landscape of computing and storage technology for the average person, but the incalculably large amount of data involved has to be stored somewhere. To understand how data centers make this access possible, and improve the economy of our region in particular, we spoke to Lee Kestler, chief commercial officer at Vantage Data Centers.

ABERMAN: Tell our listeners: what is a data center?

KESTLER: A data center really is the foundation of the type of lifestyle that all of us are leading today. We’re using our phones, we’re using computers, we’re doing online learning. Higher education facilities are getting the benefit of being able to reach more students because of the online technology, and all of that activity has to reside through a network, and inside of a data center.


ABERMAN: You know, I’m old enough to remember mini computers, where we all have terminals, and everything was stored in a big box some place, mini computer, or larger computer. It looks, in some ways, like the world has just gone in a big circle. We’ve come to the same place. Is that right?

KESTLER: It sure seems that way. I mean, the benefit, though, of today’s compute, is that all of us can use the information and technology that’s now located in a central repository, in what will be a campus of data centers, and is now known as the cloud. The cloud is that opportunity for all of us who have the ability to connect to the Internet, to not need all that computer horsepower sitting at our desk, or sitting in a room down the hallway where we can’t get in and get to our files.

Now, we can have it all on our phone. We can have it on a tablet. Students in elementary school can have access to it, and they can use the things that people use in the business world, even at their young age through elementary school, middle school, etc.

ABERMAN: So now what we have is a world where we’re all connected. We have all these devices to connect us, through the speed of light. We’re exchanging information, but that information has to exist someplace. And that’s where the physical and the cyber world really come together, and that’s what data centers are, right?

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KESTLER: That’s right. So, the data centers themselves today are really physical buildings that you and I used to call warehouses. But they’re purpose-built and they’re purpose-built for a reason, they’re purpose-built to be in a very conditioned environment, to utilize electricity very efficiently. So, it’s good for the environment. We all use electricity, and one of the big things we want to be cognizant of is our impact on the environment.

How you generate electricity, whether it’s through coal or nuclear or solar or wind, all of that matters to those of us that are pushing the edge on technology. And data centers, in those big warehouses, while they consume a lot of energy, we are big proponents of using renewable energies, as an example, that make the world a better place, or trying to be a good neighbor. And that’s one of the things Vantage is focused on: sustainability and corporate accountability for ourselves.

ABERMAN: Well, let me talk to you a little about that, because it does strike me that, when you look at things like autonomous vehicles, electric vehicles, computing power, and so forth. What’s underappreciated is that, unless you take these technologies and put the power generation in a single location, it’s really hard to achieve efficiency. So, what you’re telling me is that the datacenter industry started as a warehouse for data, but now what you’re doing is you’re actually using that proximity to do, what, solar power? I mean, how exactly is this manifesting itself?

KESTLER: The benefit of these intense uses of electricity, data centers as we know them, allow the utility companies, in whatever part of the country, but let’s just talk about this region, which is the largest data center market in the world now. Seventy-two plus percent of all Internet traffic runs through Ashburn, Virginia, or Northern Virginia, the Washington D.C. Capital Region.

And that number can be validated through other presentations you can reach through, like the Loudoun County Economic Development, or the Virginia State Economic Development Office. So, there is an inherent responsibility for all of us, who’ve been able to build those businesses here, in this geography, to make sure also that we’re using the natural resources as efficiently as we can. So, the use of electricity in this market by data centers, is allowing Dominion Energy in particular, as an example, in Virginia, to go after more types of renewable energy programs, because they have a higher base load of users, because of data centers.

And those data centers also make it good for you and I in our home, and the schools that are out there today that our kids are going to, that are not populated 24 by 7. Because we go to work every day. Kids are only in school certain hours during the day. The cost of electricity, and the less waste that those facilities have, are benefiting because of data centers’ 24 by 7 use of electricity. It allows the utility to make more electricity that won’t be wasted, because we’re steadily using the electricity.

ABERMAN: When you mentioned 72 percent, I visualized the Internet now almost like a big railroad, lot of railroad tracks, and that our region is the junction house for all these railroad tracks that run all over the country. Is that really what’s happened? When you say 72 percent, are we the junction box for the web?

KESTLER: Yeah, it’s interesting. You know, I’ve been in this business too long. My kids used to laugh at me because they didn’t know what I really worked in. I told them I worked in data centers, and they were like, well, what does that mean? And that’s hard to explain to a middle schooler. Of course, they’re now old, and they’re adults, and they understand what the word’s about.

But, the data centers, and the region that we are in, here in Northern Virginia, is a very unique petri dish. Because technology itself, while Vantage was founded in Silicon Valley ten years ago, we have one of the biggest campuses in Silicon Valley. So, we understand what it’s like to be a pioneer. Well, here in Northern Virginia, we are the forefront of the intersection, as you’ve called it, of technology and the consumer’s utilization of that technology, because the network traffic and the fiber optic cables that were built back in the early days of the Internet, with AOL as an example in Ashburn, and then DuPont Fabros, which was acquired by Digital Realty. Large consumption of power, and compute capacity, was intersecting in Ashburn, because the network was here first.

So, Northern Virginia had this very unique opportunity. Thank you, Steve Case. Thank you Ted Leonsis for starting that. But the bottom line is that the fiber that was put in the ground, was the foundation for allowing this industry to grow here in Northern Virginia.

ABERMAN: Do you think that the proximity to data centers is also an entrepreneurial advantage to startups and small businesses?

KESTLER: Actually I do, and it’s interesting that you bring that up, because in my time here, and I’ve been in this industry now for almost 20 years, we like to spend time giving back. We see a lot of startups. In the early days of Facebook, I knew those guys when they were in a small office in Palo Alto. But that’s in California, where we expect technology startups. But if you look back over the last eight years, and you look at that first big incubator.

1776, Donna Harris, I mean, they started something that is now propagating throughout Northern Virginia, Maryland, and it’s even working its way up towards Philadelphia now. And they were the pioneers, and I think that’s what makes it important to be a person involved in technology in Virginia, is we’ve got a big strong cyber presence. We all know that that’s a very good foundational part of the business here for technology.

But, we’ve got this Internet traffic in Northern Virginia, and we have all the things that go in and around that industry. You’ve got engineering and architecture, you’ve got software development. You’ve got the higher education. I heard one of your guests here talking about Amazon’s second headquarters, the gentleman from George Mason University, and that is an absolute fact, that the higher education facilities are going to be another reason that this ecosystem will continue to thrive.

ABERMAN: Well, I got to tell you, Lee, it was great having you here. Your enthusiasm is palpable. And I love that you moved here from Silicon Valley to bring that kind of attitude into our region. Thanks for joining us.

KESTLER: Well, thank you. It’s all about the kids.