Generator Update: Backlog Now 14 Months update from November 2006

The backlog on orders for 2 megawatt diesel generators is now 14 months and getting longer, according to Equinix CEO Peter Van Camp. These large diesel gensets are critical equipment in data centers, providing emergency power to keep servers online during local electric utility outages. Factors in the lengthy delays in generator delivery include demand from the U.S. military for use in Iraq and Afghanistan, and recovery operations from Hurricane Katrina, as well as the building boom for mission-critical facilities.

"There's now a 60-week lead time on generators," Van Camp said during Equinix' recent analysts call. "That is the situation for our supplier, and it has been trending update. We ordered a number of them just to stay ahead, because we knew we had projects underway. Rather than just-in-time provisioning, we decided to order a block of generators ahead of time. We really do feel it gives us an edge in time to market."

Acquiring 2 megawatt generators may be a particular challenge for build-to-suit projects planning phased build-outs based on tenant commitments, who are less likely to follow Equinix' strategy and order generators far ahead of time. Used 2 megawatt generators are available, but many may not meet new Environmental Protection Agency guidelines for performance and pollution control (which are also summarized in a PDF on Cummins' web site).