Every business has different data center requirements. Some companies maintain their own data centers, and others outsource their computing. An increasing number of companies are using a hybrid approach that includes both on-premises and cloud computing. No matter what type of computing environment your customers need, the operational requirements also are going to vary depending on the region.
The classic problem for all businesses is: Do they build their own data center, or work with a colocator or cloud service? Often the answer is “both,” but only after assessing the potential costs and savings and determining what to outsource. Using a cookie-cutter approach to data center design and installation typically doesn’t work, both because of individual customer needs but also because of regional conditions. When analyzing data center costs, you have to assess variables such as facilities cost, energy requirements, telecommunications and staffing. While the variables you need to examine may be the same, what those variables mean in terms of expense or cost will certainly vary by region.
So how do you assess the regional requirements for a data center and associated costs? Here are some points to consider:
Energy is the biggest cost center for most data centers. According to the Natural Resources Defense Council (NRDC), data centers are among the biggest energy consumers—and energy wasters. The NRDC estimates that data centers used 91 billion kWh in 2013 (the equivalent of 34 coal-burning power plants) and will require 140 billion kWh by 2020. As the biggest expense (and biggest polluter), where you get power and what it costs matter. Some regions will have cheaper electricity available, and more data center operators are concerned about how that energy is produced and whether or not sustainable methods help offset the carbon footprint.
Much of the energy used by data centers is to operate chillers in order to maintain an even operating temperature. Regional climate has a direct impact on cooling, and more data center operators are taking advantage of local climate conditions in order to offset chiller costs. For example, large data center operators such as Microsoft are building data centers in colder climates like Finland. In the U.S., data centers are being built inside mountains or adjacent to rivers and oceans for natural cooling. There also is a growing school of thought that data centers don’t need to be overcooled but can handle higher operating temperatures, which could have an impact on your choice of computing hardware.
The telecommunications infrastructure is also a consideration. Do you have access to high-speed lines for high-bandwidth networking applications? What do the local carriers charge? Are cables underground or above ground, and what’s the power company’s track record for system outages, especially in inclement weather? These are the kinds of questions you need to ask when considering a data center location.
In addition to the infrastructure, you need to think about overhead for the actual data center. For example, what is the cost of staffing? You want to be sure you have enough qualified personnel available to run your operations. You also need to calculate salaries and personnel costs, such as health care and vacation time. For example, does your data center need around-the-clock operation? If so, you might look at the cost of maintaining a 24-hour staff versus outsourcing for off-hours.
You also need to consider the cost of real estate. The price per square foot of required data center space may help you determine the cost-effectiveness of maintaining a regional data center, and that includes taxes and other maintenance expenses. Different states offer differing tax incentives in order to attract data centers and data center workers. Some regions will have better tax incentives and lower real estate costs. Recent reports estimate that the average enterprise data center costs $270.1 million to operate over a 10-year period, but enterprise data center owners can save up to $140.9 million with smart site selection. Charlotte, North Carolina; Colorado Springs; Salt Lake City; and Portland, Oregon, for example, are among the regions with the lowest costs for data center operations.
The Cloud Hangs Over Everything
The cloud is a great equalizer. Rather than calculating regional costs and doing a cost analysis, many IT managers simplify things by calculating cloud costs instead. With the cloud, there are no regional considerations. The cloud is its own region where the requirements and cost structures are the same for anyone with a cloud connection. It’s all a matter of choosing the right cloud services company with the features and infrastructure to support your business.
So no matter what your data center requirements, where you locate your data center does matter. Solution providers need to be prepared to help customers understand and assess these regional variables, providing guidance with regard to power and cooling requirements, equipment selection, outsourcing and cloud services. Helping customers make the most of their data center investment ensures they will invest more in the future.