Looking for that shopping list to see if you have the budget? You’ll never know what data center equipment really costs you until you acquire it and start using it. However, a few rules of thumb can help to put things in context and understand how different elements drive expenses.


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Globally, costs are determined in two ways.

  1. The first, naturally enough, is the total amount of data center equipment related to the data center's size.
  2. The second is the level of availability required of the data center. A Tier I data center with basic non-redundant infrastructure will be less expensive to equip than a Tier IV data center with full fault tolerance.

Typical Equipment Required

We can split equipment into two categories. The first is the end-user IT equipment, including servers, storage units, and network equipment. End-user enterprises may organize this differently according to their required performance and availability. For instance, “scale up” to build a bigger server or “scale out” to add additional servers are two typical choices.

The second is “all the rest,” meaning the additional equipment required to allow the end-user IT equipment to function usefully and reliably. The notions of “scale up” and “scale out” apply less here, even though it is possible to retrofit an existing data center to take it to a higher availability tier. The basic items are:

  • Electrical systems – including main switchgear, power distribution units, intermediary distribution, and data center lighting
  • Critical support equipment, -- such as diesel backup generators and UPS equipment
  • Internal fittings -- including the access floor and ceiling systems
  • Mechanical systems -- including HVAC
  • Fire protection system
  • Plumbing system
  • Monitoring and security systems -- facility management, CCTV, and building access system
  • Core networking installation -- shared between different end-user IT installations

Other non-negligible items are the construction costs of the data center, including the cost of the real estate (highly variable), building, structural steel, walls, and floors. We simplify things by leaving them out of the discussion, but somebody still has to pay for them!

Sample Price Tags

Let’s start with a modest data center size for housing 10 cabinets (standard 19-inch x 73.5-inch/42U) of end-user IT equipment. Estimates will always vary, but a web simulator based on previous data center project costs might indicate prices for a Tier I data center on the order of:

  • $222,000 for power equipment (electrical, backup, lighting)
  • $48,000 for HVAC, plumbing, floor and ceiling systems, and fire protection
  • $14,000 for monitoring, security, and core networking.

If you wanted to equip a Tier IV data center instead, each price would almost double. (Add an extra 80% to 90%.)

Data Center Size and Crossover Points

As the number of cabinets increases, so, of course, do these equipment costs. Many companies are interested in the relationship between a DIY approach and a data center rental or colocation solution.

At lower levels, a colocation solution is more economical. The crossover point where it becomes financially feasible to consider building your own data center might be around the 75-cabinet level for a Tier I facility and 120 cabinets for a Tier IV facility.

However, this analysis only considers the data center equipment costs described here.

Additional factors are costs of ownership (maintenance, repair, upgrades) and costs of qualified personnel to run the facility. You can look forward to hours of fun with that financial spreadsheet model before you get a definitive answer!

Where is the crossover point for your organization in terms of building your own data center or using a service? Tell us how this works for your business with a line of two in the Comments section below.


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