Yahoo! is revamping its entire data center infrastructure. The company is investing more than $500m in new data center construction on three continents, its VP of operations Scott Noteboom announced at the DatacenterDynamics New York 2011 conference on Thursday, 10 March.

Many of the new data centers will be built to the next generation of Yahoo!’s data center design called Flex Tier Data Center. The multi-tier design promises to reduce construction time to five months per phase, lower cost to $3m-$5m per 1MW and provide higher uptime for critical applications.

All of the company’s infrastructure will be moved to the new facilities in what Noteboom said would likely be the largest migration in history of the Internet. The plan is to consolidate the current 31 data centers into 13 new facilities in the US, Europe, Latin America and Asia-Pacific by the end of 2014.

While consolidating the primary data centers, Yahoo! will increase the number of network POPs (from 27 to 30) and edge pods (from 17 to 38).

The company’s ongoing construction projects include data center builds in Quincy, Washington, Omaha, Nebraska, Chicago metro area, Singapore and Lockport, New York.

At the Lockport site, Yahoo! is building the second phase of its infamous "Computing Coop" data center. It attracted a lot of press when it was officially launched in September 2010.

While the company has a sales office in New York City, where it gets to interact with its customer base – the advertising community – it chose to locate its new data center about 350 miles away from New York, in the small City of Lockport. Noteboom said the choice was made based on an old real-estate principle: location, location, location.

"Because we’re in the advertising business … our heart is really in new York city when it comes to being in touch with our customers. That being said, our nervous system is in upstate and there’s a lot of reasons for that."

The key reasons are cost of real estate, electricity, lower taxes, affordable workforce and economization-friendly climate. Together with efficiency of the new design, low-cost power and land have resulted in substantially lower cost of doing business.

The cost of hosting a Yahoo! mail farm (a segment of infrastructure that supports a certain amount of mail accounts) in a legacy New York City data center is more than $3,000, Noteboom said. The Lockport facility is able to support the same mail farm for less than $400.