Digital Realty Trust (DLR) is now offering guarantees that its data center construction projects will be completed on schedule. The company says it believes it is the first provider to offer assurances that projects will be delivered on time and on budget. The guarantee is available with Digital Realty's Turn-Key Datacenter, Build-to-Suit Datacenter, and POD Architecture Services projects.
As the world's largest owner and operator of data center space, Digital Realty is clearly hoping to leverage its experience and supply chain to appeal to customers concerned about the potential for cost overruns and schedule slippage when building their own facility.
In a recent survey here at Data Center Knowledge, readers reported that using a wholesale provider limited cost overruns. In-house data center projects were twice as likely to have cost over runs between $1 million and $10 million, as opposed to projects that involved a wholesale provider.
"Essentially, we are offering customers the industry's first risk-free data center product line," said Brent Behrman, Vice President of Global Sales at Digital Realty Trust. "Data center builds can be fraught with risk for customers that take a do-it-yourself approach to their data centers or that work with construction companies that do not specialize in data centers. Projects can often veer off course, leading to delays of months or years and cost overruns of millions or tens of millions of dollars. Digital Realty Trust's guarantees eliminate those risks for our customers."
The guarantees and remedies are included in the final lease agreement between Digital Realty and the customer, and may vary based on the preference of each customer, the coimpany said. "Based on what we know about our customers, some might prefer one remedy while another would prefer something very different, so we customize the remedy for the guarantee built into each customer's contract," said spokesperson Rich Miller (no relation).
"Designing and building data centers today is a complex process that has many inherent risks associated with it," said Michelle Bailey, Research Vice President for IDC's Datacenter Trends Program. "For most IT organizations, planning, engineering and constructing these specialized facilities is a multi-year process that often results in budget overruns and delays in delivery.
"Two key success factors in effective datacenter delivery are shortening time to market and injecting more predictability around the datacenter blueprint," said Bailey. "The longer a datacenter project takes, the more likely it is to miss meeting corporate objectives and disrupting capacity planning models. Risk assessment and risk mitigation are therefore critical requirements for any company undertaking a datacenter project."
"Providing customers with guaranteed pricing and delivery, even for custom projects, is unique in the industry," said Dave Caron, Senior Vice President of Portfolio Management at Digital Realty Trust. "Rather than take on the risks associated with a $10 million, $50 million or $100 million datacenter project, our ability to provide this guarantee program offers customers a clear, risk-free option."