Sears' Data Center Strategy: A Model For Unused Properties?

Sears hopes to fill its empty stores with servers. Will the troubled retailer forge a new path for companies with unused space?

Serdar Yegulalp

May 28, 2013

3 Min Read
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The last name anyone would associate with "server infrastructure" would be the long-embattled retailer Sears. Many of its stores now stand empty as the company has gradually lost out to e-tailers faster-moving big-box retailers like Target, Costco and Wal-Mart.

But now Sears has cooked up a plan to make use of all that empty retail space: turn it into data centers. If it works, it might well point a way towards how companies could get the most out of their unused properties.

The whole effort is being organized by Ubiquity Critical Environments, a newly created subsidiary of Sears's parent company. Its job is to look at the over 2,500 properties that used to carry the Sears and Kmart brands and see which ones can be cost-effectively converted into data centers.

Crain's Chicago Business pointed out that this plan alone won't save a company that lost $930 million in its 2012 fiscal year. But it also noted that 71 percent of the U.S. population lives within 10 miles of one of Sears' buildings.

That implies one of the ways Sears could make money from its switch-to-servers idea would be to rent out its data centers as content distribution sites. The rising market for video streaming, for instance, could benefit from having a whole new Web of content sites designed to serve video to U.S. audiences across as few hops as possible. Sears is exploring other ideas, such as business continuity.

Yet another option is to lease out the roofs and towers of those properties to telecom providers like AT&T and Verizon. With demand for mobile bandwidth surging, it makes sense, and Ubiquity is looking into cutting a bulk deal with tower-space and rooftop-rights leasing outfits to lease out all of that space in one swoop. This would conjure up a fast source of continuous revenue on Ubiquity's part.

So would this data center conversion be a model for other companies with lots of properties but little idea what to do with them?

The short answer is "maybe." Retail properties aren't all alike, even those acquired by name-brand companies with tons of prime real estate in their portfolios. Data centers need electricity, fat data connections, and cooling to be viable, with the first two being the most demanding criteria that not every location can satisfy. Most data centers are built from scratch and located in areas that have good access to power and networking; existing buildings might not have those benefits.

That said, the idea alone is striking. It's a clear symptom of how -- as more of our commerce and culture moves online -- various vacuums will be left in their wake, many in the form of acres of bare concrete and thousands of square feet of empty rooms.

We all know how nature (and commerce) abhors a vacuum, so how those spaces are to be filled is an open question. But if Sears succeeds in filling those rooms with IT gear, maybe its catalog will list compute and storage services alongside refrigerators and lawn mowers.

Serdar Yegulalp is a veteran IT journalist.

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