Steve Ballmer says Microsoft runs over 1 million servers, but what is the cost?

At last week's Microsoft Worldwide Partner Conference in Houston, the company's CEO Steve Ballmer made this remark during his opening keynote speech:

We have something over a million servers in our data center infrastructure. Google is bigger than we are. Amazon is a little bit smaller. You get Yahoo! and Facebook, and then everybody else is 100,000 units probably or less.

That's a lot of processors and software running nearly 24/7 but what are the costs to build and operate that much hardware? This week, former Microsoft team member, and current vice-president of Amazon, James Hamilton tried to dissect just how much power it takes to run all those servers and how much money Microsoft needed to build and house the servers in the first place

In his personal blog, Hamilton estimated that each server run about 150 to 300W. Assuming that number is correct, he estimated that the total amount of power to run all of the servers comes to 300MW, or three hundred million watts. If those numbers are correct, then Microsoft uses 2,629,743 MWh or 2.6 terawatt hours of power per year; that's enough to power 230,000 homes in the US.

Assuming an average cost of $2,000 for each server, Microsoft has spent about $2 billion just for the server hardware, according to Hamilton. If you add the cost of building the actual data center buildings, plus the cost of networking, and the total amount for all those servers comes to $4.25 billion, at least according to his figures.

While that's a lot of money, it's also possible that Microsoft could have saved some cash by buying servers in bulk. As far as the power estimates, it's also possible that the hardware and software in the servers could be optimized to use less energy. In any event, it's unlikely that Microsoft will ever break down these numbers officially.

Source: James Hamilton's blog via GigaOM | Image via Microsoft

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Well I say you can use some good common sense. If that's enough power to power 230,000 homes, how much is an average electric bill? I would say most people likely don't go over $100 per month except in summer months when we all use more electricity for air conditioners and fans. I know my bill is usually about $60. So I will say the average would be $70 per home x 230,000 = 16.1M per month x 12 = 193.2M per year.

This is not counting discounts. This also doesn't count, that they may use solar power during daylight hours at some centers. It also doesn't consider what kind of incentives the States gave to have MS in town. Also taxes in each place is different.

Either way its the price of doing business and they can afford it.

The calculation already takes into account some discount pricing on Servers Hardware etc. So it is a decent estimate.

And 5B is nothing in the Size of Microsoft. And it is not like they built it all within one year.

Neat! I do wonder how much of their resources use renewable energy? Also, I'm assuming the power costs are the servers themselves, not including any climate control (temperature, humidity, etc).

they didn't do this overnight though, and no doubt if they did sink over 4 billion into their network its generating them a lot of revenue. They are a software company, they do things with code. They are likely running advanced server software that has enhancements we won't see for another 4-5 years.

Kinda like how NT never meant anything in super computer world, and now runs one of the biggest clouds (if not the biggest considering what MS runs on Azure) in the world.

$2,000 per server? it seems quite high to me; MS is not buying units in single digit.... I am pretty sure they get hefty discounts.

Fritzly said,
$2,000 per server? it seems quite high to me; MS is not buying units in single digit.... I am pretty sure they get hefty discounts.

Depend in the server. For example, Blade Servers are not cheaper than $2k, while some "desktop server" could cost about $1k.

There is one company that wasnt mentioned, a very important company in the coming months. Either an oversight by Ballmer, or it does not bode well for the unnamed company :-p

Also my understanding of the Azure data centers is that unprovisioned hardware is essentially in 'sleep mode' until load brings them online so of those million servers, many are not actually 'running' 24/7

Tempus said,
Also my understanding of the Azure data centers is that unprovisioned hardware is essentially in 'sleep mode' until load brings them online so of those million servers, many are not actually 'running' 24/7

If the sleep mode on their servers works so well, how come sleep mode on my desktop makes it crash every single time, even right after a fresh install. It's a totally bogus scam so Microsoft can spy on me in my sleep!

NastySasquatch said,

If the sleep mode on their servers works so well, how come sleep mode on my desktop makes it crash every single time, even right after a fresh install. It's a totally bogus scam so Microsoft can spy on me in my sleep!

Totally! /s

NastySasquatch said,

If the sleep mode on their servers works so well, how come sleep mode on my desktop makes it crash every single time, even right after a fresh install.

Drivers.

You're running drivers written by some 20-year-old in Taiwan, working for the various component manufacturers.

They're running drivers that were also written by some 20-year-old in Taiwan, but that have gone through an additional level of testing and debugging by Microsoft engineers.

Plus, the display driver is the most problematic driver. Most of Microsoft's servers are not running an accelerated display driver. If you get rid of the graphics driver, then that immediately improves your reliability 10-fold.

That last is, in fact, the biggest point. (Microsoft's Basic Display Adapter driver for Windows Server since Server 2003 is both SVGA-register compatible and as stable as heck, and it's gotten more stable - not less - with each code optimization since. There are two quibbles with the BDA - resolution supported tops out at a mere 1280x01024 (Server 2012R2), and foreground 2D performance is less than a more optimized driver from the IHV. However, notice that I did state that those are quibbles, especially the latter, as such performance is far from critical for a server OS - any server OS.)

Different hardware choices?
I have no idea what Microsoft uses for their Azure DCs in terms of hardware today - however, internally (Microsoft campus) they have a history of using Compaq (now HP) ProLiant servers (both deskside and rackable). However much you might want to hate on some of Compaq's (or even HP's own) desktop hardware, their server hardware (and especially ProLiant) is as good as it gets - why else did HP get rid of their own (pre-Compaq) server hardware and go with ProLiants all the way across? Also, quite a number of features that originated with the ProLiant servers have shown up in HP's desktops (even the mainstream Pavilion line).

TomJones said,

Drivers.

You're running drivers written by some 20-year-old in Taiwan, working for the various component manufacturers.

They're running drivers that were also written by some 20-year-old in Taiwan, but that have gone through an additional level of testing and debugging by Microsoft engineers.

Plus, the display driver is the most problematic driver. Most of Microsoft's servers are not running an accelerated display driver. If you get rid of the graphics driver, then that immediately improves your reliability 10-fold.

Sorry, that joke went over your head I think.

snuffy said,
I doubt they have a million physical servers...

I wouldn't. If I remember correctly, they installed about 300k servers in a Chicago DC alone using containers (they can have 7k servers inside each, if not more). The server infrastructure doesn't say US only. They have DCs in europe too.

Why doubt?
Google's datacenter in Groningen is 100k or so physical servers. That's just 1 datacenter.
I'm sure MS isn't far behind or at least on the same level when it comes to amount of physical servers.

snuffy said,
I doubt they have a million physical servers...

While that could very well be the case, the article is about hardware cost and power consumption...so whether there's one VM per host vs 100, that would skew the numbers to a point where they'd be meaningless. So I have to think these are physical machines.

their chicago data center alone has containers with 2 000 servers in each container and a total amount of servers 300 000 or more for that location alone. so worldwide, with al their data centers, they most definitely have over a million servers.

With Azure growing as it is, and XBL being a paid service, then does it matter? If anything I'd say they're making money.

Making $$$ in boatloads. I did not realize the rate the Azure was growing until I read up on it the other day. Amazing return on investment on MS part. The way Microsoft has done this is what amazes me. They say that Azure will have paid for itself sooner rather than later, and the $$$ made from it, basically takes care of expanding and maintaining it.