Santa requires a huge technology operation to track his supply chain for toy manufacturing, optimize his delivery schedule, and maintain his naughty/nice list.
However there is little research on the Internet on Mr. Claus’ data centers. Perhaps this is because Santa is impossible to get in touch with on the phone.
Or maybe it is because letters to his home go un-answered until December 25th and, even then, the replies are baubles in stockings.
And while Gartner helps 12,000 CIOs and IT leaders on a daily basis, neither Santa nor his Chief Technology Elf is included. (And I checked the list twice.) Despite the limited information on the Santa’s technology budget, though, it is possible to make an educated guess.
The United Nations estimated that there were 1.9 billion children under the age of 15 in 2010. If Santa only visits children who believe in him, that leaves around 585 million, or 31.7%, kids worldwide potentially getting visits from the man in red.
If we include older teenagers who once believed, despite cries of embarrassment, that number increases to 778 million.
778 million is pretty close to the size of Facebook's user base – a billion monthly active users as of September 2012.
So Facebook’s infrastructure sets a rough upper limit on the size of IT operations at the North Pole since it is a bit larger than Saint Nicholas’ total addressable market.
Companies rarely give out exact details about their technology infrastructure, as it may reveal a competitive advantage. However, analysts can use energy data to help estimate the size of an organization’s IT infrastructure. Jonathan Koomey of Stanford used such methodology to estimate that Google had 900,000 servers in 2010. Similarly, James Hamilton used energy data to put Facebook’s server count at 180,000.
Moreover, there are a few public companies that do release detailed information about their technology infrastructure. As of September 30th 2012, Rackspace listed 89,051 servers in its quarterly report.
The chart below shows Rackspace’s total capital expenditures and the amount of power it uses:
According to this data, Rackspace spent $85 million in a single quarter on its infrastructure. The costs include a lot of groundbreaking on new real estate and data centers, and like other organizations adapting to the rise of cloud computing, Santa’s workshop is probably undergoing a similar process of expanding and modernizing its IT infrastructure.
If Santa’s data center requires a similar scale of server deployment as Facebook, and these servers are deployed on the same cost basis as Rackspace’s infrastructure, an estimate of Santa’s annual IT budget would be about $518 million.
That is a lot of money for someone who delivers presents for a shipping and handling charge of cookies, milk, and kissing from mommy. However, the ROI with all the happy faces around the world is surely incalculable.
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