4 Tips to Reduce the Cost to Build a Data Center


Cost To Build A Data Center-1

The data center industry is in a state of rapid growth. The sector is experiencing an unprecedented level of demand for capacity and processing, and it seems unlikely that the pace will slow any time soon.  

The data center boom is driven in large part by changes to both business and personal data usage, kickstarted by the COVID-19 pandemic, that will likely endure for the foreseeable future. Remote and hybrid work environments were once a perk enjoyed by a select few, but they have quickly become the norm adopted by businesses globally. 

Similarly, digital transformation was part of a five-year plan for many organizations. But now, these initiatives are mission-critical and fast-tracked due to the need to digitize business functions and support remote workforce productivity.

Across the board, dependence on the internet has risen over the past two years, driven by users' reliance on cloud and web applications for everything from streaming weekend movies to running quarterly profit and loss review meetings. 

Ways Data Centers Are Keeping Up with Capacity Demand

Existing data center rack space isn’t sufficient to keep up with modern capacity demands, but the price to build new facilities is high. According to some estimates, the average cost to build a data center is between $10 million and $12 million per megawatt, and the typical edge facility costs between $8 million and $9 million per megawatt. 

To stay competitive in the market, facility owners are looking to build new data centers quickly and economically in a way that meets four key business criteria:

  • The new facility costs less to build.
  • The new facility reduces operating costs.
  • The new facility can be deployed quickly.
  • The new facility is designed to operate more efficiently. 

4 Ways to Speed Deployment and Lower the Cost to Build a Data Center

The traditional approach to building and managing data center capacity doesn’t provide the efficiency and flexibility needed to keep up with demand and mitigate common obstacles, such as supply chain disruptions and a shortage of skilled construction and IT workers.

Here are four ways to reduce the cost to build a data center (and enjoy cost savings in the long term):

Build for today, but with the future in mind.

Unlike traditional, stick-built construction methods, modular data centers don’t lock owners into a set footprint size or require extra unused capacity to be built “just in case.”

Modular construction techniques are scalable and flexible, so owners can design and build a facility that matches their current requirements, with the peace of mind that they can add more capacity if and when their needs change.

Premanufactured data centers provide fast time to value because components can be built, assembled and tested in a controlled factory environment. 

Because modular data center manufacturers often take a vendor-agnostic approach to sourcing materials and components, they experience fewer of the supply chain delays and labor issues that plague the construction industry today.

Think outside the hub.

Major metropolitan areas have long been the prime spot for data center construction. However, rising real estate costs and a scarcity of available land make it difficult for anyone other than the giant players to establish or expand their footprint in tier 1 markets.

As a result, data centers are moving to tier 2 and tier 3 markets, in which they have more space to expand and real estate is available and affordable. 

Expanding into smaller markets has the additional benefit of bringing capacity closer to the edge, where many users are now working and living. For many data center owners, deploying multiple edge facilities is a better option than building one large data center because it can reduce latency issues for a greater variety and volume of users.

Consider colocation.

As more enterprises accelerate their digital transformation initiatives, they move out of their on-premises data centers in droves. With computing now largely conducted in the cloud, it makes less sense for a business to shoulder the expense of powering and maintaining its own facility.

Colocation facilities provide economies of scale, sharing cooling, power and security costs between tenants. These shared facilities also enable businesses to scale their capacity up or down as needed to meet demand.

Keep design simple and optimal.

One of the most effective ways to reduce the cost to build a data center is to design the facility using the minimum amount of infrastructure. That’s not to say that the data center will lack capabilities. Minimizing infrastructure simply means that the design takes advantage of the most streamlined options, optimizing your data center solution to fit your organization's current needs, with the foresight for requirements in the future.

For example, instead of installing freestanding electrical systems, opt for a modular approach using skid-based mechanical and electrical systems. These systems are not only fast and less expensive to deploy, but they also allow owners to add modules as necessary to accommodate growth.  

More Ways to Save on Data Center Construction 

The data center industry is in an unusual spot. With historically high demand for capacity, there has never been a better time to build. However, a sluggish economy and hard-to-source materials and components make deploying new facilities more expensive and less expeditious. 

Watch our on-demand webinar, “Vendor Neutrality & Open Source: Optimizing the Data Center Design Process,” to find out how to cut costs and increase deployment time. 


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