Oct
31

Data Centers — What are the Costs of Ownership?

Data Centers — What are the Costs of Ownership?

October 31
By

As Cloud Computing continues to grow in popularity many are beginning to explore the pros and cons of developing their own data center, either to create a Private Cloud network for their own enterprise, or possibly looking to offer Cloud-based services to customers in their own location or industry sector.

So what are the costs involved in owning data centers? The total cost includes facilities, server technology and related equipment — hardware and software, networking and bandwidth costs, as well as hiring the engineers and technical staff to perform the IT operations role. Anyone looking to start their own data center needs to explore everything that goes in the total cost of ownership.

It is Important to Size Things Properly

One of the most important factors when costing out a data center is to size things properly up front. Building a facility with a capacity of 100kW but only utilizing 10 percent of that power makes no sense — however optimistic growth projections might be. Predicting and designing for the ultimate utilization is a key factor in determining the total cost of ownership.

APC describes this issue in a white paper on the costs incurred when over-sizing a data center. According to the power company: “The power and cooling systems in a typical 100 kW data center have a capital cost on the order of $870,000 or $8.70 per Watt. This analysis indicates that on the order of 40% or $344,000 of this investment is wasted.” This assumes a utilization factor that grows from 20 percent to 60 percent over 10 years which is typical for most data centers.

In short, accurate usage projections and proper sizing during the design period are vital!

Other Relevant Factors when Determining Data Center Cost

Another excellent white paper from APC breaks down what makes up the total cost of ownership for a typical rack installed in a data center. The power company estimates that one rack in a data center costs a total of $120K in capital over its lifetime, which is typically 10 years as mentioned earlier. Using this information it is possible to derive estimates for data centers of all sizes on a rack by rack basis.

The cost percentages break down as follows:

  • Electricity: 20 percent
  • Engineering and Installation Manpower: 18 percent
  • Power and Server Equipment: 18 percent
  • Facility Space: 15 percent
  • Service and Maintenance: 15 percent
  • HVAC Equipment: 6 percent
  • Project Management: 5 percent
  • Rack Hardware: 2 percent
  • System Monitoring: 1 percent

A glance at those percentages reveals that along with engineering staffing, facilities and utility related costs make up the vast majority of the capital required to run and operate a data center. Any software and networking costs don’t appear to be considered, as well. The APC report concludes that rightsizing the data center design has the potential to save nearly 60 percent in the total cost involved in data center development in operations.

Leveraging the modularity and scalability of current server equipment as well as the potential for virtualization is another must when performing data center design. This is where the potential for significant savings and ultimately profits lies.

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