It’s no secret that bigger data centers benefit from economies of scale. It costs less to provide X amount of data center capacity in a massive warehouse-scale facility than it does in a small data center.
The number of factors influencing total data center cost is almost countless, but that economies of scale are real is generally accepted as a fact. However, little data has been available publicly on exactly how much of a difference those economies of scale can make. A recent study by the Ponemon Institute, funded by Emerson Network Power, aims to quantify this difference.
And, as it turns out, the difference is huge. Even if you compare a data center that is 500 to 5,000 square feet in size to one that is between 5,001 and 10,000 square feet, it costs as much as 64 percent less on average to provide 1kW of IT capacity in the larger facility, the researchers found.
The difference is much starker if you compare the smallest data centers to the largest ones. The average annual data center cost per kW ranges from $5,467 for data centers larger than 50,000 square feet to $26,495 for facilities that are between 500 and 5,000 square feet in size.
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The researchers drew their conclusions by analyzing data from a survey of annual costs for 41 data centers in North America, including amortized plant, amortized IT assets, operating costs, and energy.
That 64 percent drop in data center costs when comparing the two smallest size tiers used in the study is the largest. As you go up in size, the cost differences between neighboring tiers shrink but nevertheless remain substantial:
- In the 25,001 to 50,000 square foot range, cost/kw were 23 percent lower than in the 10,001 to 25,000 square foot range;
- In the over 50,000 square foot range, cost/kW were 21 percent lower than costs in the 25,001 to 50,000 square foot range.
Source: Cost to Support Compute Capacity, Ponemon Institute, 2016
Economies of scale make a difference in all four cost categories the study examined (plant, IT, operating, energy), but the impact is greatest in two of the biggest elements of total data center cost: operating and energy, which together constitute about 80 percent of the total.
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Energy cost to support 1kW of IT load in the smallest data center was 180 percent higher than in the largest data center analyzed. The difference in operating costs was 129 percent.
The researchers also found that data center cost per kW decreases as rack density increases. It cost 68 percent less to support 1kW in facilities with average rack density of 8.5kW than in facilities with average rack density of 4.5kW.
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