The cost to build data center facilities is one question. However, let’s back up a little. Why would you want to build a data center in the first place? Possible reasons include:

  • Your data is too sensitive to be kept in a data center built or managed by somebody else.
  • You already have a significant part of the data center, which makes the completion of the project economically viable compared to other solutions.
  • You are unaware of other solutions like data center leasing or colocation.
  • You want to be the one who offers the leasing or colocation service.
  • You know no fear and have lots of money.

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The fact is that building a data center takes both money and expertise. Nevertheless, if your heart is set on constructing your own facility, here are pointers to help you in that discussion with your finance director.

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Size Matters When Building a Data Center and Rightsizing Even More So

Naturally enough, there is a relationship between size and the funds needed to build a data center, although ballpark figures are often all over the place because of different variables.

For the sake of argument, we can start with a figure of $1,000 per square foot. A 1,000 square ft. data center would then cost $1 million on that basis. A data center of the size that Facebook or Google might use would cost from $250 million to $500 million.

Any calculation useful for you, in particular, needs to take account of your specific requirements and situation. To build one data center, you will need:

  • A building for the data center. Costs and suitability will vary according to location. If you want to use a building you already own, make sure it is in the right place (access, power, network connections, and so on.) Otherwise, look for another one.
  • Servers and storage units to put in your data center. If you have them already remember to factor in the cost of moving and installing them in the new facility.
  • Software licenses. Whether you have them or buy them, you will need them in your new data center.
  • Power. Costs may be as high as $100,000 per megawatt. It depends. Remember to add in backup power facilities as well (industrial-strength battery backup and diesel generator, for instance.)
  • Network connectivity. One mile of fiber optic connection may cost as much as $250,000.
  • Cooling. You’ll need the equipment to take the heat away and the power installation to drive that equipment. Among other things, this will all depend on the type of servers you want to run.

Rightsizing is clearly a key aspect when budgets run into millions of dollars. Your total costs will vary according to the level of reliability and availability you want for your data center (Tier 1, 2, 3, or 4.) Making everything Tier 4 when Tier 1 or 2 would do is a waste of money. On the other hand, if you need Tier 4, be prepared to pay for it.

Total Cost of Ownership

You’ll also want to factor in operational, maintenance, and upgrade costs. While these are not part of the initial “build data center” costs, they can stress your finances too.

Just one example – plan to renew your IT servers every three years to avoid falling behind in performance and reliability.

Did building your own data center work for you? Tell us why you made that decision, with a note in the space underneath for comments.


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