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Published on 2nd February 2012 by Yevgeniy Sverdlik
Facebook filed for an IPO on Wednesday. The documents filed with the US Securities and Exchange Commission shed light on the kind of expenditures required to maintain a data center infrastructure for the world’s largest and fastest-growing social network.
Facebook’s total cost of revenue went from US$223m in 2009 to $493m in 2010 to $860m in 2011. These are 121% and 74% annual increases respectively. That’s an added operational expenditure of $270m in 2010 and $367m in 2011, and the company attributes each increase primarily to the growing cost of operating its rapidly expanding data center infrastructure.
Data center operational expenses include facility and server depreciation, equipment rent expenses, energy and bandwidth costs, support and maintenance costs and staff salaries, benefits and share-based compensation.
Facebook’s total capital investment in data center infrastructure – including the cost of servers, networking equipment and storage, as well as data center construction – was $606m in 2011.
This capital cost reflects the change in infrastructure strategy Facebook has recently gone through: from solely leasing facilities from commercial data center providers to building its own.
The new approach has proven to cost less than leasing data center space and using industry-standard servers (the company uses custom-designed servers in its own data centers), according to the SEC filing.
Facebook began serving its products out of its own data centers in 2011, starting with the launch of its Prineville, Oregon, facility in April. In November 2010, it announced construction of a data center in North Carolina and in October 2011 the company made public plans to build one in Sweden.
Facebook is investing in more company-owned data centers in the US and Europe to retain its quality of service as its global user base continues to grow, according to the SEC filing.
The company is expanding capacity at both Oregon and North Carolina sites.