This makes sense. Most of the spaces Sears is closing are obsolescent for retail uses for several reasons. There is a vast over-supply of retail space in general, partially because the boom generated construction for the sake of construction, partially because the bust reduced consumer spending and partially because of the internet.
Retail shopping has also changed. Malls are being replaced by power centers and urban core retail is being revitalized. And there's Walmart for household items and Home Depot for white goods and Dicks for athletic equimpment etc.
One of the biggest changes is the way in which stores are placed relative to catchment. Driving patterns have changed and interstate access is more important than a high traffic corner for big box retail. Sears locations were based on the old model.
That said, their locations on older arterials tends to correlate with high levels of utility infrastructure. A collapsing retail micro-environment may mean surplus utility capacity. Which reminds me that another trend making Sears commercial buildings obsolescent is the radically improved energy efficiency of modern retail design - big boxes have skylights, etc.
[edit] A bit more about power supply. Local power companies sell power. That's how they make money. Like the Sears stores are surplus retail space, they often have capacity in the wrong places. They will cut deals in exchange for a long term return - it's why they run lines to a site in the first place.
Still, it's ridiculous that Sears fumbled so thoroughly information age. Their background as a catalogue store should've positioned them perfectly for online shopping - effectively just an expansion of the catalogue concept. Having a physical storefront in tandem with a catalogue is fantastic for returns and other problems, and their full appliance service model is also still an impressive product even today.
Sears was positioned to do far better than it did, even with its anachronistic department stores. The leadership just completely fumbled the information age.
Lots of good points. K-Mart is especially ripe for conversion since, in addition to your points, their stores are two large for most retailers to move into and too small for a Wal-Mart or Home Depot.
“Sears and Kmart never deployed wireless on the rooftops, so there’s no rooftop usage at present,” he added. “There’s tons of interest. I will put as many of the rooftops in play as I can.”
I wonder if they will consider covering excess space with solar PV panels? They could become a massive distributed power source, which would contribute somewhat towards the power requirements of the data centre below.
It's amazing to think of how the internet is changing cities and buildings. Reminds me of phone boxes that are being converted into other uses (such as electric vehicle recharging stations, mini-libraries and Wi-Fi hotspots) since they've been made obsolete by mobile phones.
Somewhat tangential, but still part of the core argument:
Most of the issue with power is moving it. Generating power is not trivial, but it's easier than moving power, which is still very inefficient. Distributed solar panels on the roofs of Sears facilities might offset their own carbon footprint, but it's unlikely that the power they generate would have a significant impact on the surrounding area.
This is the reason we don't have giant floating solar panels in the ocean, for example.
I'm a little surprised by this. The article implies that shuttered Sears stores already have the power and data capacity to function as a data center, but I can't imagine why. Compared to similar sized buildings (office buildings or factories, mostly), Sears retail locations don't seem to have a lot of power- or data-intensive needs.
Sears does have some amazing infrastructure (lots of square footage, locations at key transportation points in densely populated areas throughout the country, huge parking lots) but those aren't really the kind of features that data centers are usually optimizing for. I'm sure they're finding creative uses for this infrastructure, but I doubt it's anything like a data center as we think of one.
The closed stores tend to be old, which means their original power requirements were based on what today would be grossly inefficient, and they are in locations with high levels of utility infrastructure and declining demand due to both the closure of other buildings and the increasing efficiency of those that remain.
Retail is actually fairly intensive from a power perspective, lighting levels are high to show off goods. The capacity of cooling systems is also high compared to office uses because the design case is a mob of shoppers [edit: think August afternoon during the tax free back to school weekend]. Unlike lighting, people generate a lot of latent heat, and unlike office workers they are moving. Also unlike office workers, feeling a little hot means they will take their business elsewhere.
Now, that's not to say that the infrastructure of a retail space is going to compare to a heavy industrial use, such as a steel mill or juice plant. But those aren't what Sears owns. And in any event, industrial sites don't offer the opportunity for redevelopment of the parking lot with smaller boxes as a means of diversifying the underlying asset. The sites aren't bad, the way in which they are developed is.
That is the problem, there is NOT enough power on site to run a datacenter. The article quoted one location with 127ksqft and 5MW. 5MW is tiny for that footprint. To give you an idea, you need to roll at least 300-400w/sqft of power/cooling to be viable, calculate in UPS and other losses, and 5MW powers around 5000sqft of datacenter space which is only a couple hundred racks of servers and storage. They're probably going to need 40-100M to retrofit that space, so I'd say the math is not on their side...
This reads like a realestate person proposing this, not a datacenter person...
The article mentions that the target locations are standalone buildings with good fiber and power already connected. They mention 5 megawatts for one location.
I don't know why a Sears location would need lots of power (beyond tons of lights and powerful HVAC units), but I can see the need for quality and low-latency data: retail POS generates a large amount of transactional data, and you need low latency for database syncing and credit card/loyalty card transactions.
Well, my guess would be that they might have similar requirement power-wise. Keep in mind that those store need power for fixtures, refrigeration / freezing ...
Someone knowledgeable around to confirm or refute ?
It probably would need some development but to me it's not as senseless as it seems.
Interesting move -- feels like this is a natural response to the not-so-sudden realization by "normal" folks that you can get a BIG multiple on $/sqft as a data center over a more traditional tenant.
A parking lot is better than an empty lot. A warehouse is better than a parking lot. And a data center is better than a warehouse :)
The good news for us consumers is that as the supply steadily ticks up, pricing will come down (at least for space - who's to say where bandwidth costs go).
Not quite retail, but Amazon's main Data Centre in Dublin is the former main warehouse used by one of Ireland's largest retailers. It's gone from being full of beans and nappies to servers full of kitten gifs.
Cooling costs ! Buildings whose whole structure doesn't take data center cooling requirements into account are at a significant cost disadvantage over modern ones built specifically with cooling optimization in mind.
The buildings do not have to be full to bring in more revenue than when sitting empty. Once they pay for operating expenses, everything else is profit. In many cases, I suspect the buildings are paid for, so the value of the real-estate is a sunk cost.
These aren't going to be on Google's scale. This is Ace Hardware not Home Depot. Optimization scales accordingly.
But you have to include the cost of building the entire building and real estate. That's a sunk cost for Sears, so they don't have to worry about that.
Dealing with the politics, aspy personalities, and payment issues with a small space is hard enough... I can't imagine it magnified to shopping mall proportions!
I'm not sure I understand this. Retail real estate is all about increasing footfall, not just the size of it. Hence why you see the airport bombarded with shopping nowadays. Unless there are particular Sears locations that don't see benefit from adjacent footfalling (just made that word up) retail outlets, then it makes sense. But then it wouldn't make sense for Sears to be there in the first place if the footfall opportunity wasn't there or couldn't be created there.
Times change, I've seen this locally. In the US Midwest, various metro areas have lost population over the last couple decades. As a result, they don't need as much retail space to support the current population. Something has to give. The Sears closest to me is attached to a condemned mall. Sears stays open because they own the building though. The reason they're there is because originally, the mall was the place to be for retail.
I'm not surprised at all, given the Sears real estate portfolio. In Indianapolis, a company converted an old mall into a data center, and it seems to be working pretty well [1]. Retail buildings probably have a decent connection to the power grid, so it would really make sense to make use of the open spaces.
warrants noting that malls require anchor tenants to work. It's the convenience of to being able to go to one location and get clothes, tools, make-up, music, videos, books, etc, that makes malls work. I know people have been predicting the demise of the shopping mall since their introduction but this will be interesting to watch.
Also, wouldn't the premium of leasing or owning "retail" style property make the cost of maintaining the building too costly? I don't think Sears needs a datacenter on main street, or within a strip-mall.
After RTFA I pulled this:
"Farney acknowledges that many of Sears’ mall-based retail locations aren’t viable for data center usage. “I don’t think the industry is yet ready for a mall-based data center,” he said. “That may take some time. The stand-alone location is optimal.”"
It seems they are considering it more for certain stand-alone locations.
The challenge I see here is power provisioning. With the space that a Sears store offers, you'd be hard pressed to put 10 to 50 MW of power into it. But perhaps if you already have the land covered smaller things are more desirable.
This is an opportunity where they could usher in a new glorious era of personal cloud computing that solves the problem of the government basically owning your hardware, software, and the usage of your software if the government catches you (or the software) so much as jaywalk.
Instead of selling floor space, they could subdivide the space like the "storage building" units. The customers could pay for a rack, and they would need a key to access it. Legally the hardware, software and data would be owned by the owner, and not the government. Anyone else would need a warrant to come in and rape your data, software, and hardware just like if the server was next to my bed.
Part of the reason why I have all my servers in places I own is because of this problem. This is a brief opportunity to explore cloud computing and give the communists and socialists who want everyone to share a common purse on the computing front a black eye.
My pain point is "I want boat loads of CPU cycles and Internet connection speeds, and I want physical legal ownership of the rack space, hardware, software, AND data, and I don't want to have to buy a building that I have to air condition, power, internet connect, secure, and pay taxes on.
This is a brief opportunity to explore cloud computing and give the communists and socialists who want everyone to share a common purse on the computing front a black eye.
Wow, where did that come from?
Cloud computing is communist now? I could have sworn otherwise.
> Instead of selling floor space, they could subdivide the space like the "storage building" units. The customers could pay for a rack, and they would need a key to access it.
You know thats how colocation works right now, right?
"Instead of selling floor space, they could subdivide the space like the "storage building" units. The customers could pay for a rack, and they would need a key to access it."
Many DCs offer quarter racks that are under lock and key. You just bring your hardware and get your carrier neutral drop.
There is a lot of odd precedence that makes renting small storage units not the same thing as larger units. Standalone Property > Multi Unit Property > Storage Space > Rented computers.
[+] [-] brudgers|13 years ago|reply
Retail shopping has also changed. Malls are being replaced by power centers and urban core retail is being revitalized. And there's Walmart for household items and Home Depot for white goods and Dicks for athletic equimpment etc.
One of the biggest changes is the way in which stores are placed relative to catchment. Driving patterns have changed and interstate access is more important than a high traffic corner for big box retail. Sears locations were based on the old model.
That said, their locations on older arterials tends to correlate with high levels of utility infrastructure. A collapsing retail micro-environment may mean surplus utility capacity. Which reminds me that another trend making Sears commercial buildings obsolescent is the radically improved energy efficiency of modern retail design - big boxes have skylights, etc.
[edit] A bit more about power supply. Local power companies sell power. That's how they make money. Like the Sears stores are surplus retail space, they often have capacity in the wrong places. They will cut deals in exchange for a long term return - it's why they run lines to a site in the first place.
[+] [-] Pxtl|13 years ago|reply
Sears was positioned to do far better than it did, even with its anachronistic department stores. The leadership just completely fumbled the information age.
[+] [-] jaynos|13 years ago|reply
[+] [-] alberth|13 years ago|reply
[1] http://www.nytimes.com/2012/10/31/realestate/commercial/rack...
[+] [-] noonespecial|13 years ago|reply
[+] [-] patrickk|13 years ago|reply
I wonder if they will consider covering excess space with solar PV panels? They could become a massive distributed power source, which would contribute somewhat towards the power requirements of the data centre below.
It's amazing to think of how the internet is changing cities and buildings. Reminds me of phone boxes that are being converted into other uses (such as electric vehicle recharging stations, mini-libraries and Wi-Fi hotspots) since they've been made obsolete by mobile phones.
http://www.engadget.com/2012/05/10/spectrum-interactive-wifi...
http://phys.org/news192197933.html
http://www.gadling.com/2012/08/19/british-phoneboxes-convert...
[+] [-] josh2600|13 years ago|reply
Most of the issue with power is moving it. Generating power is not trivial, but it's easier than moving power, which is still very inefficient. Distributed solar panels on the roofs of Sears facilities might offset their own carbon footprint, but it's unlikely that the power they generate would have a significant impact on the surrounding area.
This is the reason we don't have giant floating solar panels in the ocean, for example.
[+] [-] jmharvey|13 years ago|reply
Sears does have some amazing infrastructure (lots of square footage, locations at key transportation points in densely populated areas throughout the country, huge parking lots) but those aren't really the kind of features that data centers are usually optimizing for. I'm sure they're finding creative uses for this infrastructure, but I doubt it's anything like a data center as we think of one.
[+] [-] brudgers|13 years ago|reply
Retail is actually fairly intensive from a power perspective, lighting levels are high to show off goods. The capacity of cooling systems is also high compared to office uses because the design case is a mob of shoppers [edit: think August afternoon during the tax free back to school weekend]. Unlike lighting, people generate a lot of latent heat, and unlike office workers they are moving. Also unlike office workers, feeling a little hot means they will take their business elsewhere.
Now, that's not to say that the infrastructure of a retail space is going to compare to a heavy industrial use, such as a steel mill or juice plant. But those aren't what Sears owns. And in any event, industrial sites don't offer the opportunity for redevelopment of the parking lot with smaller boxes as a means of diversifying the underlying asset. The sites aren't bad, the way in which they are developed is.
[+] [-] bifrost|13 years ago|reply
This reads like a realestate person proposing this, not a datacenter person...
[+] [-] chmullig|13 years ago|reply
[+] [-] wikwocket|13 years ago|reply
I don't know why a Sears location would need lots of power (beyond tons of lights and powerful HVAC units), but I can see the need for quality and low-latency data: retail POS generates a large amount of transactional data, and you need low latency for database syncing and credit card/loyalty card transactions.
[+] [-] ldng|13 years ago|reply
It probably would need some development but to me it's not as senseless as it seems.
[+] [-] bluedino|13 years ago|reply
http://www.bizjournals.com/sanantonio/news/2013/03/21/stormi...
[+] [-] function_seven|13 years ago|reply
[+] [-] nlh|13 years ago|reply
A parking lot is better than an empty lot. A warehouse is better than a parking lot. And a data center is better than a warehouse :)
The good news for us consumers is that as the supply steadily ticks up, pricing will come down (at least for space - who's to say where bandwidth costs go).
[+] [-] fudged71|13 years ago|reply
Paving paradise, &c ;)
[+] [-] jgeorge|13 years ago|reply
[+] [-] symfoniq|13 years ago|reply
[+] [-] ahi|13 years ago|reply
[+] [-] ManAboutCouch|13 years ago|reply
http://www.datacenterknowledge.com/archives/2011/02/09/amazo...
[+] [-] liotier|13 years ago|reply
[+] [-] brudgers|13 years ago|reply
These aren't going to be on Google's scale. This is Ace Hardware not Home Depot. Optimization scales accordingly.
[+] [-] SoftwareMaven|13 years ago|reply
[+] [-] makerops|13 years ago|reply
[+] [-] dredmorbius|13 years ago|reply
One of the few fiction books I've read in recent years that's bent my mind.
[+] [-] telmnstr|13 years ago|reply
[+] [-] kickingvegas|13 years ago|reply
[+] [-] mbesto|13 years ago|reply
[+] [-] xhrpost|13 years ago|reply
[+] [-] mbreese|13 years ago|reply
[1] http://www.datacenterknowledge.com/archives/2012/10/30/lifel...
[+] [-] riggins|13 years ago|reply
warrants noting that malls require anchor tenants to work. It's the convenience of to being able to go to one location and get clothes, tools, make-up, music, videos, books, etc, that makes malls work. I know people have been predicting the demise of the shopping mall since their introduction but this will be interesting to watch.
[+] [-] muzz|13 years ago|reply
Data centers built by Google, Facebook, etc. seem to all be built from the ground up, and close to things like power plants.
[+] [-] josefresco|13 years ago|reply
After RTFA I pulled this:
"Farney acknowledges that many of Sears’ mall-based retail locations aren’t viable for data center usage. “I don’t think the industry is yet ready for a mall-based data center,” he said. “That may take some time. The stand-alone location is optimal.”"
It seems they are considering it more for certain stand-alone locations.
[+] [-] enigmo|13 years ago|reply
[+] [-] ChuckMcM|13 years ago|reply
[+] [-] ceautery|13 years ago|reply
[+] [-] sebastianavina|13 years ago|reply
Google buys SEARS, register as a new G4 provider.
[+] [-] josephb|13 years ago|reply
[+] [-] maeon3|13 years ago|reply
Instead of selling floor space, they could subdivide the space like the "storage building" units. The customers could pay for a rack, and they would need a key to access it. Legally the hardware, software and data would be owned by the owner, and not the government. Anyone else would need a warrant to come in and rape your data, software, and hardware just like if the server was next to my bed.
Part of the reason why I have all my servers in places I own is because of this problem. This is a brief opportunity to explore cloud computing and give the communists and socialists who want everyone to share a common purse on the computing front a black eye.
My pain point is "I want boat loads of CPU cycles and Internet connection speeds, and I want physical legal ownership of the rack space, hardware, software, AND data, and I don't want to have to buy a building that I have to air condition, power, internet connect, secure, and pay taxes on.
[+] [-] nodata|13 years ago|reply
Wow, where did that come from?
Cloud computing is communist now? I could have sworn otherwise.
[+] [-] bifrost|13 years ago|reply
You know thats how colocation works right now, right?
[+] [-] mtalantikite|13 years ago|reply
"Instead of selling floor space, they could subdivide the space like the "storage building" units. The customers could pay for a rack, and they would need a key to access it."
Many DCs offer quarter racks that are under lock and key. You just bring your hardware and get your carrier neutral drop.
[+] [-] Retric|13 years ago|reply