Repurposing old malls into datacenters: A workable idea?

Some old malls and department stores are being converted into datacenters. Is this a smart reuse of existing infrastructure or another nail in retail's coffin? Our analysis questions the viability of this plan.
Written by David Gewirtz, Senior Contributing Editor

I grew up in the sixties and seventies in northern New Jersey. For malls, this was the heyday and epicenter of shop-til-you-drop nirvana. Malls blossomed in New Jersey, but they also grew like weeds all across the nation. Chain stores were taking over from mom-and-pop shops, and the big box stores had yet to make an appearance.

And while malls were the king of retail, I've never been much of a mall man.

Even so, back in 2011, I went up against Jason Perlow in a great debate, Is e-commerce killing brick and mortar? I argued that retail had a future no matter what, and Jason declared retail to be pretty much doomed.

Interestingly, as I re-read my arguments, I didn't as much say that malls had a future as I said that retail (in the form of WalMarts and big box stores) is going to be around for a while.

So, I was only partially wrong. Even so, Jason creamed me in the debate.

I only bring this up because of an article I just read in the Wall Street Journal, entitled "Malls Fill Vacant Stores With Server Rooms." The article's subtitle itself is pretty damning, reinforcing Jason's arguments from a few years ago: "Empty Department Stores Are Converted Into Data Centers; 'Who Else Wants Them?'"

The article goes on to explore some of the companies who have bought abandoned malls and turned them into datacenters. This is not necessarily as easy as you might think. Sure, there's a lot of land and a lot of segmented space, but datacenters require precision control of atmospherics, and malls were designed around cooling and heating people, not cooling and heating machines.

There are also the security issues. Sure, there has always been some level of security in malls to protect the goods being sold. But the mall cop is such an iconic figure that movies have been made celebrating them. If you haven't yet seen Paul Blart, Mall Cop, I invite you to do so. It's a much more charming movie than you'd think.

In any case, as the WSJ reports, the big digital companies like Facebook and Google aren't repurposing malls. Instead, they're building their own datacenters. Small companies like the ones I've owned also don't need to transform malls. We fit all our gear on one rack. Rather than rebuilding a mall, we hacked a basement linen closet in my apartment.

So there's only a middle ground where malls as datacenters might work. And even there, the problem is that many mid-sized companies are likely to use SaaS and PaaS services like Amazon Web Services, rather than build out their own server infrastructure. I've got to say that if AWS existed back in 1998 when we started building up ZATZ, we would have never invested in the hardware. Never.

It's kind of ironic that even in providing IT services, Amazon wins out in many cases over the malls.

So if there's going to be a datacenter build-out that uses malls, it's a relatively narrow sliver of the market. And that's before the issues of whether it's more or less costly to transform a mall into a secured facility.

For example, do you rent just the former anchor department store, and still operate knowing there are other potential risks in the mall (like restaurants that cook with fire)?

Do you try to transform a structure built for people flow to add additional support, security, and environmental services? Do you need a structure with all that parking? Can you sell off the land that makes up the parking lot? How robust is the land the mall is built on? How were the foundations built? How strong is the facility? Can it truly secure mission-critical servers?

It doesn't seem like converting malls to datacenters is a clear win, even if the idea of transforming these hubs of human hustle and bustle into networks of nodes seems a bit dystopian.

If there were to be any reinvented future for malls, it might be for the land they were built on, which, in many cases, is smack-dab in the middle of middle-class communities, ideal sources for trained employees for the datacenters. Of course, datacenters tend to employ considerably fewer employees than your standard Target store, but hopefully what datacenters lose on quantity, they make up for in wages and benefits.

More to the point, a mall might work as a refashioned corporate headquarters, where there's a mix of offices and facilities, and where the modular structure of the mall and the ample parking might be a good fit.

But repurposing an old mall as a datacenter alone? Unless the property is incredibly inexpensive, this approach is probably not the best choice for most enterprises and mid-sized businesses.

What do you think? Would you recommend repurposing the ruins of an old mall and turning it into a datacenter? TalkBack below.

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