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Data Centre Cost Benchmarking - An Insight & Common Pitfalls

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A presentation delivered by Linesight's Senior Project Manager, Pat Unger, at Enterprise Ireland's ‘Building Innovative Partnerships’ event in Amsterdam. The keynote addressed Data Centre Cost Benchmarking - An Insight & Common Pitfalls

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Data Centre Cost Benchmarking - An Insight & Common Pitfalls

  1. 1. Data Centre Cost Benchmarking – An Insight & Common Pitfalls November 10 2016
  2. 2. Agenda 2 Introductions Questions & Answers ConclusionBenchmarking Data Centres Examples Common Pitfalls Benchmarking Rational / Methodology / Types Construction Trends Global © Linesight | Private & Confidential | linesight.com 18-Nov-16
  3. 3. 3 Introductions © Linesight | Private & Confidential | linesight.com 1 18-Nov-16
  4. 4. Who we are 7 © Linesight | Private & Confidential | linesight.com Currently working on projects with a value of US$30bn across the regions Global Construction Consultants • Project Management, Project Controls & specialist Consultancy • We service clients in 150 cities in over 40 countries • Operating for 42 years • Headquartered in Dublin Ireland • ISO Accredited - QEHS 18-Nov-16
  5. 5. What we do 8 Program Management Project Management Knowledge Center Global market cost analysis | Insights Project Controls ConsultancyHealth & SafetySupply Chain Management Procurement Cost Management 18-Nov-16© Linesight | Private & Confidential | linesight.com
  6. 6. Global offices and project locations 9 18-Nov-16© Linesight | Private & Confidential | linesight.com Offices 17 Global offices throughout Europe, the Middle East, Asia Pacific and North America. Projects 150 cities in over 40 countries
  7. 7. 11 Construction Trends 18-Nov-16© Linesight | Private & Confidential | linesight.com 2
  8. 8. Global Trends 12 • Market Size of Top Global Construction Markets 18/11/2016© Linesight | Private & Confidential | linesight.com
  9. 9. Global Trends 13 Share of Construction Spending by Region 2020 18/11/2016© Linesight | Private & Confidential | linesight.com
  10. 10. Global Trends 14 Global Growth Forecasts for 2015 & 2016 ( % GDP growth ) 18/11/2016© Linesight | Private & Confidential | linesight.com
  11. 11. Global Trends 15 Global Capital Flows in Real Estate in 2015 18/11/2016© Linesight | Private & Confidential | linesight.com
  12. 12. 16 18-Nov-16© Linesight | Private & Confidential | linesight.com Netherlands Market  Overall Construction contributed 4.38% to the GDP in Netherlands ( GDP $752Bn )  Data Centre Construction – remains a significant contributor
  13. 13. 17 18-Nov-16© Linesight | Private & Confidential | linesight.com Netherlands Market • Current Tender Pricing at 2012 levels. • In context of tendering, Inflation considered to be flat • Attractive time to be building?
  14. 14. 18 Benchmarking Rational / Methodology / Types 18-Nov-16© Linesight | Private & Confidential | linesight.com 3
  15. 15. Benchmarking – Rationale & Uses 19 • Part of a greater topic on ‘Market Intelligence’ • Aims to establish how much a company/organisation needs to improve to be at world class levels of performance in their strategy and associated business processes, business results, and critical enablers. • Identifies gaps by triangulating between current performance, other companies performance, and world class performance • Increasing appetite from Client • Uses —Price Point (Macro & Micro Level) —Costing Models for Capex / Opex —Negotiation Tool 18/11/2016© Linesight | Private & Confidential | linesight.com
  16. 16. Benchmarking – Methodology 20 • Determine What to Benchmark • Identify Performance Measures • Identify Benchmark Partners / Sources • Determine Data Collection / Analysis Plan • Measure Yourself • Measure Partner / World-Class Organization • Analyse Gaps • Specify Goals / Action Plan to Meet and Surpass • Implement and Monitor Progress • Data has NO value unless it is used. 18/11/2016© Linesight | Private & Confidential | linesight.com
  17. 17. Benchmarking – Practical Advantages 21 • Consistent global approach for all users • Assists with budget development & forecasting • Optimisation of Negotiation plans —Consistent approach to negotiation —Generation of regional negotiation targets —Facilitates more in-depth negotiation • Unit price comparison as well as $/MW • Availability of historical unit pricing for comparisons • Helps identify inconsistent pricing from vendors 18/11/2016© Linesight | Private & Confidential | linesight.com
  18. 18. Benchmarking – Types 22 18/11/2016© Linesight | Private & Confidential | linesight.com Example of Time to Market Analysis of 6no. Equip vendors Example of GEO Benchmark Comparisons of 6no. Projects
  19. 19. 23 Benchmarking Data Centre Examples Common Pitfalls 18-Nov-16© Linesight | Private & Confidential | linesight.com 4
  20. 20. Data Center Experience 24 18-Nov-16© Linesight | Private & Confidential | linesight.com 31 USA & Mexico 15 Europe 8 Aus/NZ 20 Middle East 7 APAC 120Data Centers Worldwide +20m Sq. ft. of white space +2000mw Mega Watt critical power 20 UK 19 Ireland
  21. 21. General Benchmarking : International Construction Cost Range Index 2015 25 18/11/2016© Linesight | Private & Confidential | linesight.com 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 India Bahrain Oman UAE Germany China Qatar Kuwait USA Netherlands Ireland Japan Australia UK Singapore
  22. 22. Global DC Benchmarking : US$m / MW 26 18/11/2016© Linesight | Private & Confidential | linesight.com 12.96 12.7008 12.64 12.46 12.35 12.3 12.25 11.81 11.43 10.59 9 10 11 12 13 New York San Francisco Singapore Amsterdam Frankfurt London Paris Melbourne Sydney Dublin
  23. 23. US DC Benchmarking : o|a US$m/MW 27 18/11/2016© Linesight | Private & Confidential | linesight.com Region 2 $12.5m/MW Region 3 $10.4m/MW Region 4 $11.1m/MW Region 1 $10.9m/MW 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Construction CSA Mechanical Installations Electrical Installations Equipment Security IT Cabling Fees, Prelims, Tax Hot Aisle Containment Design
  24. 24. Common Pitfalls 28 • Land • Incoming Power / Utilities • Site Conditions • Building Type (Single / Double / Multi storey) • Soft Costs • DC Density per rack • Currency / Fx 18/11/2016© Linesight | Private & Confidential | linesight.com
  25. 25. Common Pitfalls 29 • Tiering • Total Cost of Ownership • Seismic Constraints • Demarcation line for Fit-Out Works • Deployment of Capex for future phases 18/11/2016© Linesight | Private & Confidential | linesight.com
  26. 26. 30 Conclusion 18-Nov-16© Linesight | Private & Confidential | linesight.com 5
  27. 27. Conclusion 31 • Setting the baseline is key to successful benchmarking • Dangerous tool if not correctly calibrated • Benchmarking can be used in many ways throughout the project journey • Overall aim = Greater Market Intelligence for Informed Decision Making 18/11/2016© Linesight | Private & Confidential | linesight.com
  28. 28. Thank you. 32 18-Nov-16© Linesight | Private & Confidential | linesight.com Contact details Pat Unger, Snr. Project Manager Mobile: +353 872238255 pat.unger@linesight,com

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