Data Center Site Selection and its Impact on TCO

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There are many factors that go into selecting the proper site for your next data center. As part of the Data Center Knowledge Executive Guide Series on Total Cost of Ownership we will look at how site selection impacts TCO.

Site Selection Factors

  • Geographic Location – Stability
  • Distance and Availability of Utilities and Communications Providers
  • Cost of Energy (Local Rates and Green Energy Incentives)
  • Distance and Availability of Communications Providers
  • Availability of Skilled Labor and Costs

Of course, picking a site location that is physically secure and has reliable access to power, water and communica¬tions is an important first step. Since energy is the most significant operating cost of a data center, focus your attention on the cost of power and its long term impact. Energy costs are highly location dependent and are based on local or purchased power generation costs (related to fuel types or sustainable sources such as, hydro, wind or solar), as well as any state and local taxes (or tax incentives). In the United States it can range from 2.5 cents to 25 cents per KWH and also can vary by the scale and peak energy demands of your site.

The US Department of Energy provides a state-by-state guide of average energy prices; however, it is important to check local rates and look for utility and state energy incentives which can provide lower costs, energy efficiency rebates or tax benefits. Another factor is location and long term overall market demand for constrained resources such as power and water, which can ultimately limit the data center capacity and impact the initial capital cost and final TCO.

In addition, having access to redundant power from separate sub-stations is an important consideration, and if possible; two separate power grids (this is not often feasible but highly desirable from a reliability viewpoint). If this is a location with or near a high level of industrial or commercial development, this may reduce the costs of bringing new utility service from a nearby sub-station, however, be sure to investigate overall power capacity and reserves to ensure that power will not be constrained in the future. If the site is relatively remote and needs to be newly developed, be sure to factor in the cost of bringing in new high voltage utility services, which can be expensive and require long lead times to have approved and installed.

Carrier provisioning (fiber network connectivity), which again depending on site location and distance from major carrier(s) Point-of-Presence, can have a significant impact on the bandwidth, redundancy and latency in re¬lation to a target market; such as the real-time financial transactions. Site Selection can also impact the facility’s energy efficiency (primarily cooling system efficiency), since it is related to the ambient temperature conditions and is location dependent.

This article is part of a series on a Data Center’s Total Cost of Ownership.

To download the entire DCK Executive Guide on Data Center Knowledge TCO with additional sidebars and charts, courtesy of Digital Realty, click here.

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