[Infowarrior] - Wal-Mart's data center remains mystery

[Richard Forno]

Wal-Mart's data center remains mystery

http://www.joplinglobe.com/local/local_story_148015054/resources_printstory
CNHI News Service

‹ By Max McCoy
Globe Investigative Writer
JANE, Mo. - Call it Area 71.
Behind a fence topped with razor wire just off U.S. Highway 71 is a bunker
of a building that Wal-Mart considers so secret that it won't even let the
county assessor inside without a nondisclosure agreement.
The 125,000-square-foot building, tucked behind a new Wal-Mart Supercenter,
is only a stone's throw from the Arkansas line and about 15 miles from
corporate headquarters in Bentonville, Ark.
There is nothing about the building to give even a hint that Wal-Mart owns
it.
Despite the glimpses through the fence of manicured grass and carefully
placed trees, the overall impression is that this is a secure site that
could withstand just about anything. Earth is packed against the sides. The
green roof - meant, perhaps, to blend into the surrounding Ozarks hills -
bristles with dish antennas. On one of the heavy steel gates at the
guardhouse is a notice that visitors must use the intercom for assistance.
What the building houses is a mystery.
Speculation
Wal-Mart's ability to crunch numbers is a favorite of conspiracy theorists,
and its data centers are the corporate counterpart to Area 51 at Groom Lake
in the state of Nevada. According to one consumer activist, Katherine
Albrecht, even the wildest conspiracy buff might be surprised at just how
much Wal-Mart knows about its customers - and how much more it would like to
know.
"We were contacted about two years ago by somebody who runs a security
company that had been asked in a request for proposals for ways they could
link video footage with customers paying for their purchases," Albrecht
said. "Wal-Mart would actually be able to view photos and video of customers
paying, say, for a pack of gum. At the time, it struck me as unbelievably
outlandish because of the amount of data storage required."
But Wal-Mart, according to a 2004 New York Times article, had enough storage
capacity to contain twice the amount of all the information available on the
Internet. For the technically minded, the exact amount was for 460 terabytes
of data. The prefix tera comes from the Greek word for monster, and a
terabyte is a trillion bytes, the basic unit of computer storage.
Albrecht, founder of Consumers Against Supermarket Privacy Invasion and
Numbering, said she never could confirm the contractor's story. That is not
surprising, since Wal-Mart seldom comments on its data capabilities and
operations.
A Globe request for information about the Jane data center was referred at
Wal-Mart headquarters to Carrie Thum, a senior information officer and
former lobbyist for the retailer.
"This is not something that we discuss publicly," Thum said. "We have no
comment. And that's off the record."
Skeleton crew
The Jane data center is an enigmatic icon to the power of data, which has
helped Wal-Mart become the largest retailer in the world, and to the
corporation's growing secrecy since founder Sam Walton's death in 1992. When
Wal-Mart constructed its primary data center at corporate headquarters in
1989, it wasn't much of a secret: It was the largest poured concrete
structure in Arkansas at the time, and Walton himself ordered a third story.
"Not only had we completely designed it, we were under construction," said
Bill Ferguson, a founder of Askew Nixon Ferguson Architects in Memphis,
Tenn. "They were pouring foundations, and Sam walked across the parking lot
one Friday at the end of the day and said, 'You know, let's add a third
floor and put some people up there.'"
Ferguson said the Bentonville data center is built on bedrock and is
designed to withstand most natural and man-made disasters, but is not
impregnable. The biggest danger, he said, is the area's frequently violent
thunderstorms.
"We studied making it tornado-proof, which is difficult," he said. "We
calculated the probability of a category 5 tornado hitting it, which was
less likely than an airplane crashing into it head-on. At the time, they
decided not to."
Since then, Ferguson said, changes have been made to increase the integrity
of the structure. The data center was designed with backup generators, fuel
on site, and room and board for a skeleton crew in the event an emergency
required an extended stay.
Ferguson said his firm learned to design data centers by working with FedEx,
which also is based in Memphis, and that the 1989 Wal-Mart data center was
built so that it could communicate via any means available - including
copper wire, fiber optics and satellites.
The firm no longer works with Wal-Mart, and Ferguson said he had no
knowledge of the design or purpose of the data center in Jane. But he
suggested that Jim Liles, a Memphis engineer, might know.
Liles said he was a consultant on the Jane project, and that Crossland
Construction was the contractor, but he was reluctant to say much else. "As
far as what its purpose is, all that has to come from Wal-Mart," Liles said.
Crossland Construction, based in Columbus, Kan., said Tim Oelke of the
company's Rogers, Ark., office had been in charge. Oelke did not return a
phone call seeking comment.
'Never saw a plan'
The data center was completed in 2004 and was part of a project that
included the Supercenter, which opened early last year, and a warehouse. The
resulting economic impact on McDonald County, known for its rolling hills
and lazy rivers, is difficult to underestimate, said Rusty Enlow.
"Just a few years ago, one new store would have been a big deal," Enlow
said. "And I'm not talking about a Supercenter. Just a gas station would
have generated excitement."
Now, Enlow said, the county's tax base has doubled, and land is going for
about $2,100 an acre, about twice what it was before the project was
announced in 2001.
Enlow is chairman of the county planning commission, a body created by
popular vote in 1964 but which had not met until this month. Enlow said he
doesn't know why the commission never met, but he believes it was because
whatever problem prompted its creation was solved before the board was
appointed. He also said he's not sure the planning commission has any real
authority, or would want any (there is no zoning in the county), but that he
and the other 18 members are eager to bring even more business into the
county.
"It seems with the opening of that store there has just been a lot of
activity," he said. "McDonald County has always been a poor county, but we
are in an excellent position now. We're a friendly place, and we're open to
things."
Wal-Mart, Enlow said, had created a business synergy that was helping the
county of 22,000 shed its hillbilly stereotype.
Enlow was director of the McDonald County Economic Development Council when
Wal-Mart quietly began scouting for land. Only after the land had been
bought south of the then-unincorporated community of Jane was it announced
that the project was Wal-Mart's, and even then, plans for the data center
were closely held.
"I never even saw a plan on it," Enlow said.
But Enlow said he watched during the construction of the data center, and
that it appeared to be a single-story building that was built "like a
bunker," with mounds of earth piled against the sides. He later was told
that it would employ 15 to 20 people, and that the building was for data
storage.
To facilitate the project, the Missouri Department of Transportation agreed
to widen Highway 71 to four lanes from Jane to the Arkansas line; a grant
was used to expand the public water district; and the Army Corps of
Engineers approved a request to fill in a small portion of wetland along
Bear Hollow Road.
Meanwhile, the village of Jane incorporated.
In April 2005, Wal-Mart used the 160,000-square-foot Supercenter to
demonstrate its micro-merchandising capabilities as part of a media
conference. Employees demonstrated hand-held Telxon (pronounced Tel-zon)
computers, which resemble hand scanners but hold a year's worth of a
particular store's sales history on every item. The devices help store
managers decide what to stock.
Bananas are Wal-Mart's best-selling produce product nationwide, but at Jane,
the top seller was lettuce, Supermarket News reported after the event.
'Secretive'
Bill Wilson, McDonald County presiding commissioner, said he has never been
inside the green-roofed data center, and that to his knowledge, only one
county official has: Assessor Laura Pope.
"I had to sign a document saying that I wouldn't talk about what's in
there," Pope said. "I've never been in a situation to tour anything like
that before. I don't want to be secretive about it. Basically, it houses
computer equipment."
Pope said she had never been asked to sign a nondisclosure agreement before
in her job as assessor, and that she didn't keep a copy. She said she didn't
appraise the building and equipment, but rather came to an agreement with
Wal-Mart on what it was worth.
They agreed that the data center would be worth $10.7 million at fair market
value, she said. The equipment inside the center was judged to be worth
nearly three times as much: $31.7 million.
The taxes that Wal-Mart paid last year on the data center totaled just more
than $500,000: $128,091 for the real estate and $373,091 for the equipment.
Pope said she did not place a value on the data stored at the building. At
an estimated worth of $42.4 million, is the Wal-Mart data center at Jane
important enough to the infrastructure of the state - or the country - to be
on Missouri's list of critical assets?
Paul Fennewald, Missouri Homeland Security coordinator, said the list is
confidential, and that he could neither confirm nor deny that the Jane
building is on it. He did say that the list includes 4,000 to 4,500 sites
across the state.
'Retail surveillance'
Albrecht, the consumer activist, said that when the contractor came to her
with the story about Wal-Mart wanting to biometrically identify customers
through video, one of the reasons given was to help law enforcement.
"You could search for all sales of a particular kind of rope and get a photo
of who bought it," she said. "On the other end, you could research all of
the purchases of a particular individual, even if they paid in cash."
Albrecht is the co-author of "Spychips," about the use of RFID, or radio
frequency identification devices, by the government and corporations to
track individuals. She lives in Nashua, N.H., and is getting ready to
receive a doctorate of education in consumer education.
"To the best of our knowledge, the only consumer-level item that is (RFID)
tagged at Wal-Mart are Hewlett-Packard products and some Sanyo television
sets," she said. "Now, the privacy implications of that are fairly trivial,
because you're not going to be walking down the street carrying your printer
box in your back pocket."
But in 2003, she said, Wal-Mart did two experiments using RFID on smaller
items: razor blades and lipstick.
At Brockton, Mass., Albrecht said, the company used a surveillance camera on
a shelf that was linked to chips in packages of razor blades. When someone
picked up a package, she said, the shelf camera would be activated. Another
camera would take a mug shot of the customer at the checkout stand.
At Broken Arrow, Okla., she said, the company linked devices in packages of
lipstick that triggered a camera that allowed the lipstick manufacturer to
watch consumers on live video.
The experiments apparently were aimed at decreasing theft or for use in
merchandise research, she said. "Since 1999, I've been working on a
phenomenon called retail surveillance, which is a whole panoply of
technologies that are being secretly deployed," she said. "I think most
people, when they learn about these technologies, are quite disturbed.
There's a sense that when you enter a retail space, you should retain some
degree of privacy."
But, Albrecht said, there's a push among retailers to collect as much
information about their customers as possible - and to keep the lower-profit
individuals, known as "barnacles" and "bottom-feeders," away.
"There's a lot of hand-wringing about how we can find out even more about
our customers," she said. "And to the extent that Wal-Mart may be creating
the ability to monitor consumers by RFID and identify them by video, I'm
extremely concerned. ... If that's the case, they would need that kind of
data storage."

Wal-Mart's stand on RFID
"Electronic product codes (EPCs) can best be described as the next
generation of bar codes. Unlike current bar codes, which only share that a
carton contains product XYZ, EPCs can identify one box of product XYZ from
another box of product XYZ.
"This is possible because EPCs are powered by radio frequency identification
or RFID. EPCs do not track customers. ... EPCs assist retailers in more
closely monitoring where products are as they move from manufacturers to
warehouses to a store's backroom.
"This helps us do a better job of having the right products on the shelves
when you come to buy them."
Source: www.walmart.com

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