Datacenter Build Cost — Full Document

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exchange:
  USD_EUR: 0.92
  EUR_USD: 1.09
  USD_GBP: 0.79
  GBP_USD: 1.27
globals:
  sqft: 1000

Datacenter Build Cost Analysis #

Should you build a small dedicated datacenter or rent space in someone else’s? This document models the full lifecycle cost: capital expenditure (capex), operating expenditure (opex), equipment depreciation, cost growth over time, and a head-to-head comparison with colocation (colo).

All costs are in USD unless noted. The facility is 1,000 square feet (sqft), a typical size for a small private datacenter.

Facility Sizing & Baseline CapEx #

Construction costs for dedicated datacenters typically range from $625 to $1,135 per gross square foot. We use a midpoint estimate:

cost_sqft = $875 → $875.00
capex = @globals.sqft * cost_sqft → $875K

CapEx Breakdown by Component #

The budget is heavily weighted toward electrical and mechanical systems, not the building shell itself. Industry benchmarks:

elec = 42.5% of capex → $371.88K
hvac = 17.5% of capex → $153.12K
fitout = 22.5% of capex → $196.88K
shell = 17.5% of capex → $153.12K

Sanity check – components should sum to total:

components = elec + hvac + fitout + shell → $875K

Tier Comparison #

Uptime Institute tiers define redundancy levels. Tier II (partial redundancy) costs roughly $2,300/sqft. Tier III (concurrently maintainable) costs roughly $7,700/sqft. Moving up tiers more than triples the price:

tier_ii = $2300 * @globals.sqft → $2.3M
tier_iii = $7700 * @globals.sqft → $7.7M
tier_mult = 7700 / 2300 → 3.347826

Power Infrastructure #

Datacenter construction is often quoted per megawatt (MW) of commissioned IT load. Standard facilities average $7M to $12M per MW:

it_load = 200 kilowatts → 200 kW

A standard 1 MW facility costs $7M-$12M. Our load as a fraction of 1 MW:

load_frac = 200 / 1000 → 0.2
mw_cost = $9.5M → $9.5M
power = load_frac * mw_cost → $1.9M

For reference, 1000 kilowatts converts cleanly:

1000 kilowatts in megawatts → 1 megawatts

International Equipment Pricing #

Specialized cooling equipment from a European vendor, quoted in euros. Exchange rates are defined in the document frontmatter:

eu_cooling = €45000 → €45K
cooling = eu_cooling in USD → $49.05K

Operating Expenses #

Ongoing costs for a small datacenter typically fall between $50,000 and $100,000 annually, dominated by maintenance (40%), electricity, and labor:

opex = $75000 → $75K
maint = 40% of opex → $30K

Electricity is often quoted per kilowatt-hour. At $0.10/hour for our 200 kW load, the annual electricity cost accumulates quickly:

annual_elec = $0.10/hour over 1 year → $876.00

What does that rate look like per day?

daily_elec = $0.10/hour per day → 2.4 $/day

OpEx Growth Projection #

Operating costs don’t stay flat. Assuming 4% annual inflation, here’s where opex lands after 5 and 10 years:

opex_5yr = compound $75000 by 4% over 5 years → $91.25K
opex_10yr = compound $75000 by 4% over 10 years → $111.02K

Equipment Depreciation #

Servers and networking gear lose value quickly. Using declining-balance depreciation at 20% per year over a 5-year refresh cycle:

servers = depreciate $200000 by 20% over 5 years → $65.54K

Cooling systems last longer but still depreciate. A $45,000 unit at 15% per year, with a $5,000 salvage floor:

cooling_depr = depreciate $45000 by 15% over 10 years to $5000 → $8,859.35

Build vs. Colocation #

Colocation means renting space in a third-party facility. A typical 10-cabinet setup in the UK runs about £2,200/month:

colo_mo = £2200 → £2,200.00
colo_usd = colo_mo in USD → $2,794.00

Using the rate-over-time syntax to accumulate monthly costs:

colo_3yr = $2794/month over 3 years → $101.98K

Compare with building your own over the same 3 years:

build_tco = capex + (opex * 3) → $1.1M
savings = colo_3yr - build_tco → -$998.02K
build_cheaper = build_tco < colo_3yr → false

Modular Alternative #

Modular (prefab) datacenters offer a pay-as-you-grow model. Each module costs $150,000 to $1,000,000 and can be added incrementally. Starting with one module and adding one per year for 4 years:

grow $150000 by $150000 over 4 → $750K

Modular builds typically save 20-30% on upfront capital vs traditional:

modular_savings = 25% of capex → $218.75K

Executive Summary #

Key figures rounded for quick reference:

capex as napkin → $880K
opex as napkin → $75K
build_tco as napkin → $1.1M
colo_3yr as napkin → $100K

Building costs $1.1M over 3 years vs $101.98K for colo. The build-vs-buy savings are -$998.02K — assuming you can tolerate the $875K upfront capital outlay.