Notes from the Consultant’s Jungle

You may be familiar with the “Dollars per KW plus Dollars per Square Foot of Computer Floor” white paper from the Uptime Institute for data center construction cost estimation. Following the update to their widely referenced Tier classifications paper, this benchmark for thumbnail cost estimation has been updated as well. If you’d like to look at it directly, it can be found here.

Beginning several years ago, the Institute put together some very good work to give us guidance on the cost of data centers according to Tier classification. The cost model is based upon the premise (quite accurately so) that the cost of the MEP infrastructure is far and away the dominant driver in the cost of erecting an IT facility. The model simply separates the cost of the building and support space from the cost of the MEP infrastructure.

The benefit offered by the Institute’s work in this regard is the benchmark cost data for applying this model to your own project. The reference benchmarks are based upon a set of real-world contemporary data center construction projects, where the relevant component data is extracted, averaged, and provided for our use.

It’s the term, contemporary, in the earlier statement that makes this update of the white paper important. First, the data is updated using four additional new data center projects,… so the sample set is that much larger. This might seem insignificant, but besides having four more data points we also have four new recent data points.

Over the course of the past 12-18 months, there has been a sharp escalation in the cost of materials and components critical to the construction of data centers. The cost of steel and copper has increased world-wide, by over 50% during this time. There has also been a boom in construction of very large data centers globally, which is driving the cost of critical components like generators and chillers. Recent developments such as these are folded into the guidance given by the Institute’s model.

Not stopping with the data updates, the Institute has taken the opportunity to also include cost estimation data for “empty space” in their model. This is a pragmatic addition, given that a facility owner will want to include space in the new building that might not be specifically programmed, but is likely to be used for growth or operation of the raised floor.

Finally, the Institute offers another piece of pragmatic guidance, suggesting the level of “seed funding” necessary to accomplish the planning needed to arrive at an accurate budget estimate. This seed money is used for project planning, design/build contractors, and consulting necessary to bring the definition of the project into focus sufficient to confidently go to the Board for approval.