How Much Does a Data Center Facility Cost?

The costs associated with data center facilities can be unique for any given site based on several factors. Today, data centers are utilized to offer infrastructure and services to companies and organizations, and all of these costs related to the construction, functioning, and development of the data centers can easily go beyond the limits of a reasonable budget.

Facility Construction Costs

The basic investment costs to build a new data center facility totaled between $3 million and $10 million per IT megawatt, or MW, of capacity. This is equally largely by the tier level targeted and the required redundancy as well as the geographical location and the prevailing market situation.

Facilities with utility power and cooling feeds but with non-duplicated paths are generally the least costly and are commonly called Tier 1. High-tier data centers, equipped with multiple power and cooling feeds and with physically segregated vital components, can come at a higher price, starting at Tier 4.

Further, the price of the land, preparation of the site, and the actual construction of the data center building could bring the construction cost anywhere between $20 to $100 per square foot.

Ongoing Operational Costs

Beyond the initial construction, data center facilities incur significant ongoing operational expenses, including:

• Power and Cooling: Electricity, backup generators, HVAC systems, and other power infrastructure can cost $1 million to $5 million per megawatt annually.

• Staffing: Employing a team of technicians, engineers, and facility managers can add $1 million to $5 million per year in labor costs.

• Maintenance and Utilities: Routine maintenance, physical security, and utilities like water and Internet connectivity can range from $500,000 to $2 million per year.

Leasing vs. Building

A common reason for outsourcing the data center is to avoid capital-intensive fixed costs since many organizations instead lease space for such facilities. Leasing can then offer more flexibility and offer companies a means by which they can increase their data center space according as and when required, without necessarily having to acquire and manage the associated physical structures.

The cost of leasing cost per data center space can be between $50 and $200 per annum per square meter depending on the type of provider, geographic location, or type of services offered.

Looking at the costs of a data center facility in terms of construction and operational costs, one may need at least $50 million to over $500 million over a space of 5-10 years depending on the size, tier level, etc. This suggests that there is the need to undertake proper analysis of data center needs, and more importantly, planning of the same to ensure that such investments are well managed.