To build and operate the modern day data center is definitely an expensive feat! But you need to understand all the costs associated with building an operating a data center. TCO (Total Cost of Ownership) encompasses the sum total of operational and capital expenses involved in erecting and maintaining a data center.  TCO must analyze all parts that are included in operating the data center and it should investigate total cost involved in obtaining, utilizing, installing, sustaining, disposing and changing IT and data center assets. For a data center owned by a company, data center pricing will primarily depend on power delivery and cooling. But in data center collocation or wholesale data centers, this depends on kilowatts per cabinet, or megawatts/ kilowatts per space or module.

What do you need to know to calculate your TCO?

·         Establish data center energy cost and saving accountability in the organization – Proper attention should be given to the data center energy costs to evaluate and forecast its potential impacts on the organization. Think about the power capacity, sources, energy price scalability, etc. It is estimated that a 4 years’ server electricity cost is the same as the actual server’s cost.

·         Get the latest facts from the market – Balance the TCO with the recent efficient technologies in energy consumption, green data centers, possible energy sources, renewable sources, and virtualization of data centers.

·         Calculate direct, indirect costs and overheads from all parts of the company.

·         Compliance and regulatory guidelines also add to the TCO – Evaluate the costs for compliance with government regulations or other standards vs. contracting a provider who already assumes the cost.

Once you have completely analyzed the TCO, work with your management and finance team to see if it makes sense to build a data center or simply outsource your data center operations.

Alex Carroll

Alex Carroll

Managing Member at Lifeline Data Centers
Alex, co-owner, is responsible for all real estate, construction and mission critical facilities: hardened buildings, power systems, cooling systems, fire suppression, and environmentals. Alex also manages relationships with the telecommunications providers and has an extensive background in IT infrastructure support, database administration and software design and development. Alex architected Lifeline’s proprietary GRCA system and is hands-on every day in the data center.