Among the risk factors in Zynga’s IPO filing was the following zinger:”A significant majority of our game traffic is hosted by a single vendor, and any failure or significant interruption in our network could impact our operations and harm our business.”
This isn’t referring to Facebook, which still provides most of Zynga’s traffic and players, but to Amazon Web Services, where most of Zynga’s games are hosted.
That won’t last forever. Signs indicate that Zynga is going to wean itself from Amazon by building its own data centre.
The filing doesn’t got into a lot of detail, but uses boilerplate language like “we will continue to make big investments in servers, data centres and other infrastructure” and “We expect cost of revenue to increase for the foreseeable future as we expand our data centre capacity….” It also says that Zynga expects “to make capital expenditures of approximately $100 million to $150 million as we invest in network infrastructure to support our expected growth.”
But earlier this spring, Zynga hired Debra Chrapaty as its CIO.
Chrapaty — pictured here — was the leader of Microsoft’s data centre operations from 2003 through 2009.
During that time, Microsoft undertook a massive data centre expansion to support Bing and other online services — it built new facilities in Washington State, San Antonio, Illinois, Dublin, and several other locations. Each of them cost about $500 million to build. Some of them, like the Illinois data centre, used stacks of servers delivered in closed shipping containers — when enough of the servers break down, Microsoft can just back the container out and replace it.
Microsoft also created some pretty sophisticated software to manage the services running in all these data centres — in fact, this software was the basis for Windows Azure, Microsoft’s cloud computing answer to Amazon Web Services. (Basically, Microsoft took its own system, modified it slightly, and put it up for sale to third parties.)
Pretty advanced stuff, in other words.
Chrapaty oversaw this expansion. She also did a brief stint at networking giant Cisco before leaving to take the CIO job at Zynga.
Two other things to keep in mind:
- Zynga was one of the partners in Facebook’s Open Compute Project announced this spring. Under that project, Facebook took the revolutionary energy-efficient design of its first self-owned data centre and revealed its specs so any other company could use it. Zynga was among the first to take advantage.
- Zynga has nearly $1 billion in cash on hand — more than enough to kick start a major infrastructure push.
Stay tuned. There may be a lot more going on with Zynga than raising sheep.