Data Center Cost: Key Considerations
You can get fully equipped for as little as about $600 dollars per month to get started in a colocation. The price goes up from there, so it is important to follow these steps to make sure that you understand what you are purchasing and how much you need to purchase. Not all organizations are helpful with this process but we’re here to help with a free audit! Contact us for more about this!
Calibration pricing for your IT project is a crucial step. One important aspect of this is seeking a secure data center location to store your gear. For many, this may be your first time leaving your corporate office location and striking into the colocation world.
To the un-initiated, it can get overwhelming quickly. Salespeople calling your cell phone, asking for you to take tours and decide between different cross connect, setup fees and network options. There’s a lot to think about, and the work can pile up quickly.
Over-provisioning is the fastest way to blow up your IT budget. In the data center world we speak square feet (cabinets) and kilowatts (amps). Many customers make the mistake of confusing how this business is transacted, specifically in the amps area and end up significantly overpurchasing by anywhere from 200-300%. A project that costs 400-500 may seem viable to many, while an extra home mortgage like $1,400 per month can be the make or break difference on killing a project.
In all truth, there are many customers who have failed at getting their initiative for an off-site data center approved because of poor initial scoping and pricing. This is a solvable problem. Having done hundreds of data center tours and sales processes, I have seen the full gamut of requirements and mistakes. There are some rules to remember and some ideas to help you with the start of your search.
This guide will give you a practical way to start looking, and also how to budget prior to even reaching out. With this guide you will be able to get rough pricing that, if followed properly, will likely get you within 15-20% of your actual spend so that you have budgetary numbers to seek project approval. To remove anxiety from the buying process TRG has introduced a right-size guarantee as well as a free audit that we will provide to right-size your load. This right-size guarantee will allow for you to pare down your contract after moving in if you find that you are over-provisioned so that you do not feel “stuck” with bad scoping. Our famous audit saves customers on average 25-35% by getting it right the first time.
Build vs Colocation Data Center Costs
Cost tends to be one of the key deciding factors when businesses come to choose between a bespoke build or a colocation data center. But while a handful of companies do have the space and resources to build a private data center, this isn’t always the best option.
A colocation data center provides a range of benefits, particularly when you look at the cost effectiveness of your data solutions. Opting for a data center allows companies to access a flexible, fully scalable resource that can grow with the business. If a company chooses to build its own data center, then the costs involved in making that scalable will inevitably be far higher.
For smaller companies, a colocation data center will usually be by far the most cost effective option. Colocation data centers provide businesses of all sizes with access to cutting edge data resources, and data centers are fully staffed and secure. This means that companies can make use of a reliable and trustworthy data center, at a fraction of the cost that they would have incurred had they chosen to build such a center for their own private use.
Finding Out How Much Your Data Center Will Cost
Step 1: Figure out your required physical footprint
Most power requirements follow a pretty linear path that we can use, if you don’t know what your power is or you are not sure how to distinguish between 208V, 120V, kW etc. This is a great place to start.
When counting how “loaded” your cabinet is look at your current racks. Do a mental check of what is coming and whats not – be sure to note if there are high density loads such as blade chassis in your cabinet. If you have high density loads such as blade chassis and other devices of that nature, you will most likely be considered a “Heavily Loaded Cabinet” for purposes of this exercise, at least a “Moderately Loaded Cabinet”.
Be sure to exclude UPS systems that are in place at your current location – those rack mounted UPS systems will not need to come with you to the data center as we provide fully redundant UPS as part of the service. Also don’t be afraid to consolidate. In general, well loaded cabinets are cheaper pound for pound than cabinets that have very little power, although the lightly loaded cabinets provide a ramp for growth which is an important consideration.
If you are in the lightly loaded territory and don’t think you will ever need much more, a half cabinet may be your best option. The good news is, if you get it wrong, in a colocation data center that doesn’t charge for cross connects you can always add another cabinet and interconnect them!
Once you have done this mental math on the physical layout, ask yourself this:
Am I a lightly loaded cabinet? Or perhaps a half cabinet? (<33% of the cabinet full)
- YOUR RANGE IS A: 15A 120V Half Cabinet – 15A 208V Cabinet
- You can expect to pay in the range of $400/mo – $800/mo per cabinet depending on your power and choice of cabinet or half cabinet
Am I a moderately loaded cabinet ( 33%-70% of the cabinet full)
- YOUR RANGE IS A 15A 208V – 20A 208V CABINET
- You can expect to pay around $800-$1000/mo per cabinet
Am I a heavily loaded cabinet or do I have dense workload? (>70% of the cabinet full)
- YOU WILL LIKELY NEED A 30A 208V CABINET
- You can expect to pay roughly $1,200-$1,300/mo per cabinet at this size.
If you want to see what a fully managed data center looks like where we take care of all the rack and stack, cabling, labeling, and PDU’s for a very small price increase – check out our Colo+ and Houston Data Center page for this.
Keep in mind these are for fully fault tolerant, enterprise facilities providing true redundancy. If you are finding much cheaper or much more expensive, ask yourself twice about the sales person and facility you are at! There is generally very little variation in the primary pricing between top providers – but hidden fees are an area that will “get you” which we will discuss shortly.
Step 2: Figure out how much network you need, and how much network you want
Network providers can vary greatly in cost, and scale towards cost efficiency quickly as you go for larger circuits. For really small circuits and point to point circuits, costs can sometimes look prohibitive depending on who you talk to. We like SD-Wan technology for many organizations, and have seen the reduction in need for many point to point circuits using technology like velo-cloud – many telco organizations are doing “Managed SD-Wan” as well. Centurylink has been popular and always provides a great enterprise footprint into data centers.
Trying to get a 100 Mbps circuit from a primary provider can often cost $500-900/mo, which is often price prohibitive. We have several MSP’s in our ecosystem such as Netdepot that provide BGP optimized blends that start as low as $250/mo for network and can scale you into Gig speeds for costs as low as $850/mo. This is with multiple carriers so you get inherent redundancy and great local support.
The economies of scale taper off as you increase your network. Heavy network users can find Gig speeds as cheap as $300-500 / mo with providers like Cogent – and get into 10 gig speeds in the 2-4k/mo range even with higher end enterprise carriers. I have seen 100 Gig circuits for less than $10,000/mo in case you are wanting to bring out the big guns.
The reality is that the vast majority of users need a few hundred Mbps for their business. Many opt in at the $250/mo price point and find that acceptable and grow it as needed.
Step 3: Understand what service levels you are looking for
If you look hard enough you will find a cut rate colocation data center that is utilizing a poor design that is not fault tolerant, often times in rented or sub-letted spaces from larger buildings or colocation providers to try to address the bargain market.
They will often attempt to sit 15-20% below the market and make claims such as “A+B” power. I have seen many spurious claims such as this and performance that does not meet expectations long term. As a matter of fact, three such providers have actually closed up shop in the last two years in Houston alone and given 60-90 days notices to their clients.
If you are really looking to save money, you would be better off asking for “A Only” power at an enterprise colocation facility – you will get about the same results in terms of Uptime and Performance but a lot more continuity in terms of minimizing risk of default and a better guarantee of good service. This is generally at least 20% cheaper than AB power, so you will get the cost savings you are looking for without “slumming it”.
Also, understand that most colocation data centers in Houston are completely “Hands Off” and unmanaged. You will be handling the equipment installs yourselves. Some do offer “rack and stack” as well as “remote hands on services” but these are often in excess of $150-$250/hour. We offer 100% free remote hands on as well as a fully managed Colocation service called Colo+ here that you should check out if you want the real managed experience.
Just remember you get what you pay for and there are options for success at top data centers, you just have to know what to ask for.
Step 4: Understand the cost components of data center colocation
Bringing it all together we have several components we must consider including the hidden costs that many data center providers obfuscate.
EXAMPLE CALCULATION (THE OTHER GUYS):
- Colo Space / Power Cost: $800/mo
- Network Costs: $350/mo
- Cross Connect Fees (1 hour per month): $150/mo
- Remote Hands On Packages / Spend: $150/mo
- Total Cost (ALL IN): $1,450/mo for a moderately loaded cabinet.
We decided to completely AX remote hands on and cross connect fees to try to bring things down, see how big of a difference it can make: $800 + $350 = $1,150/mo. The price is simple and expected. We often find that we are able to provide fully managed colocation for cheaper than our competitors can provide regular (unamanged) colo.
Tying It All Together
Step 5 (Advanced): Calculate Amps or Receive a Free Site Audit
The steps we have discussed so far are a good way to develop some low/high prices for calibration. In general, the lowest you can get in the door with redundant power and network is around $600/mo out the door at any colocation worth their salt. The prices go up from there depending on how much capacity you need.
As you can see, however, there is still several hundreds of dollars of variation in our estimates and ranges. The best thing to do at this point, when you have budgetary approval and are ready to get best final pricing for your organization is to reach out and request for us to come to an audit for you. We are happy to do so prior to you even coming to tour. From this audit we will determine power usage for you and right-size the circuit.
I have seen many customers think they need a 30A 208V cabinet for example, and it turns out we were able to save them more than $400/mo by simply getting them in a smaller circuit. Or perhaps they were reading 24 amps, but it was 120V so at 208V a 20A circuit would have been acceptable. Voltages and things like that, to the uninitiated, can be extremely confusing. So it is best to provide this information to us and allow us to audit by looking at pictures or by coming out to visit.
Also unique to TRG is our right size guarantee – if we get something wrong or you over-size your own circuits and your needs change – we will change the size of your circuit and contract for you after move in to make sure that you aren’t caught with a bloated contract.
The audit really is free money and is useful data regardless as to where you end up choosing to go with your provider.