Building a data center requires significant investment and expertise, with costs influenced by factors such as location, server infrastructure, power requirements, network connectivity, and cooling systems. Operational and maintenance expenses should also be considered, and the choice of reliability tier will impact total costs. Ultimately, understanding the financial implications is crucial for deciding whether to construct a data center or explore alternative solutions like leasing or colocation.

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What Does It Cost to Build a
Data Center?

2. The cost to build data center
facilities is one question.
However, let’s back up a little.
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3. Why would you want to build a
data center in the first place?
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4. 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 completion of the project economically viable compared
to other solutions.
• You are unaware of other solutions, such as 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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5. The fact is: 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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6. Factors Needed to Build One Data Center
• 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.
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7. Factors Needed to Build One 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.
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8. 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) .
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9. Somehow, you’ll also want to factor in
operational, maintenance, and upgrade
costs.
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10. While these are not part of the initial “build
data center” costs, they can stress your
finances too.
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11. An example?
Plan on renewing your IT servers every
three years in order to avoid falling behind
in performance and reliability.
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12. Did building your own data center
work for you?
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13. Tell us why you made that decision,
with a note in the space underneath
for Comments.
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