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The data center is one notable growth area. Companies are relying on their data centers more than ever to support emerging
technological trends like cloud computing, big data, virtualization and the use of advanced mobile devices. As a result of these
trends, businesses are spending more on their data centers.
Gartner also predicted companies will spend more than $126.2 billion in 2015. But even as IT budgets grow, CIOs are pressured
to find ways to invest in technology that will reduce operating expenditures in the near term. Such goals are difficult to attain in
the data center – where a greater reliance on technology inevitably makes systems more complex.
Successful CIOs are leveraging colocation to circumvent the time, cost, and long-termmaintenance associated with building and
owning data centers. For example, the best colocation facilities feature best-in-class data center power systems, redundant cooling
architectures, and unparalleled Internet Exchange capabilities. This interconnection allows customers to seamlessly share
information with business partners, content providers, networks, carriers and other entities via the secure cloud.
Colocation offers companies more than just an easier way to gain access to interconnect infrastructure; it also reduces costs and
enables new levels of network flexibility and security. Top of the line data centers are engineered to deliver top-tier availability
backed up by 100% uptime SLA and are built with 2N redundancy of mechanical and electrical systems for a highly resilient
environment.
The Costs of Building and Operating a Data Center
On average, a 1,000-square-foot data center costs $1.6 million to
build. That number comprises just one-third of the actual cost of
owning and running a data center, which also requires power,
cooling, standby power, on-site diesel, staff, building leases and
maintenance.
Companies that opt for the “build it themselves” approach take a
big risk, assuming they’ll actually need the capacity they’ve built
for years to come and the ongoing costs associated with data
centers will remain feasible. Projecting these needs over time is
increasingly problematic given the pace of change in technology,
applications, and business.
These companies also spend 12-18 months building a custom data
center. For reference, setting up IT infrastructure can be
accomplished within a significantly shorter timeframe through
colocation.
In addition, data centers have much stricter building and code
requirements and require commercial real estate contractors. A
110V outlet in a data center, for instance, can cost 20 percent more than a standard 110V outlet in a commercial office.
Below are several other one-time and ongoing costs associated with company-owned data centers:
Cost to Build
- 45,000 square feet of ordinary office space would cost about $5 million to build, whereas a 45,000-square-foot
data center costs about $36 million. Companies planning to build their own data centers must be aware that construction costs
alone could be much more significant than initially anticipated.
Power
- the biggest single ongoing operating expense for a data center, accounting for about 70 to 80 percent of a facility’s
ongoing operational costs. Energy costs vary by region, but the industrial power rate averages about $0.0677 per kWh in the
United States and $0.1091 per kWh in Western Europe.
Staffing
- generally the largest operational expense after power, though it varies depending on region and a facility’s setup.
For example, if a company keeps security and operations staff on hand around the clock, staffing and benefits will likely cost
several hundreds of thousands of dollars per year.
Maintenance
- another significant operational expense when a company builds and owns its own data center. Annual upkeep
generally represents 3 to 5 percent of the initial construction costs. This can increase dramatically, however, if a company
decides to make a major upgrade, like bringing fiber into the data center.
Depreciation
- physical data centers are typically depreciated over the course of 20-30 years. Equipment depreciation in a
data center on average depreciates over roughly 10 years or more. Colocation investments, on the other hand, can be
depreciated over a 3-year schedule for tax purposes.
