Preview the Expense of a Data Center Build-out

One of the single biggest expenses any IT department will consider is building out a data center. Hosting your own server farm can make a lot of sense, even in the age of "the cloud," depending on your uptime and processing needs.


But it all boils down to a detailed financial analysis.


Our partners at Info~Tech Research Group have developed a Data Center Facility Budget Tool that provides a quick but fairly detailed outline of the financial profile of a data center build-out. The tool is available free to IT Business Edge members here in the IT Downloads library.


The Excel-based tool models out a data enter project over an 8-year lifecycle, as you can see in the image below.



The tool asks you to input the total square feet of the build-out, and then, based on the other values you provide, it calculates the cost per square foot of owning and operating the facility. The tool does not apply some financial metrics, such as Net Present Value (NPV), which are typical of long-range costing exercises, but it does give you a solid snapshot of the kind of expenses you need to anticipate for a data center project.


About a third of the tool's sample project's $1.7 million cost over 8 years can be assigned as capital expenses in the initial phases of the project. Some categories, such as cabling, furniture and architect fees can all be assigned to cap ex. However some other costs - fire suppression, cooling, physical security and the like - typically are recognized partially as cap ex, but mostly as operating expenses over the life of the analysis.


Some issues covered in the budget planner that might otherwise slip your attention in the early evaluation of a data center project include:


Government incentives and other reimbursements: The sample budget depicted in the tool shows a $6,000 initial credit for the project, but some local governments might offer annual abatements, dependent on the scale of your project.


Heat rejections vs. in-room cooling: The tool has separate line items for these functions, despite the fact that most industry coverage tends to lump them into the same category. The reality is that you may be dealing with two separate vendors in this category.


Permits and variances: Even if your project requires no additional square footage structures, additional power infrastructure and fire codes probably mean you will need to hassle with a zoning board. Again, the tool factors these costs in as initial, but depending on where you are, you may end up needing to purchase annual licenses.

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