Many businesses operate outside of safe capacity thresholds with little or no room to expand. According to the IDC, the average data center is 9 years old. However, Gartner states that any site more than 7 years old is obsolete. Overcrowded or obsolete data centers create a roadblock for growing organizations and building a new data center(s) is sometimes the only solution. While speed-to-market is critical to success, companies that fail to assess their business needs properly will create dead-end data centers that will not deliver uptime performance goals or meet future business needs
How can you avoid making major mistakes when entering the build and expansion world?The key lies in the methodology you use to design and build your data center facilities. All too often, companies base their plans on watts per square foot, cost to build per square foot, and tier level—criteria that may be misaligned with their overall business goals and risk profile. Poor planning leads to poor use of valuable capital and can increase operational expense.

Many organizations get overwhelmed, focusing on “speeds and feeds,” green initiatives, concurrent maintainability, power usage effectiveness (PUE) and Leadership in Energy and Environmental Design (LEED) certification. All of these criteria are critical in the decision making process. However, the details often overshadow the big picture. Most companies miss the business opportunity in a data center expansion—an expansion driven by a holistic approach.

While there are numerous consultants in the field to help you find your way, assessing ideas and input can be overwhelming. Organizations with critical capacity requirements in the 1-3 megawatt range may fall into this risk category. The critical nature of mid-size users is no less important than mega users; however internal technical expertise to drive proper expansion plans may be limited. The result is information overload from multiple sources, leading to confusion and poor decision making.

“Data center owners have so many problems right now. Their assets are mission critical, but they are out of control. Power consumption is costing them a fortune. They can’t cool what they have got and cut the risk of a catastrophic outage. And if they make an investment, by the time it is built, it is already out of date” – Stanford Group

Focusing solely on capital cost is an easy trap; the dollars required to build or expand can be staggering. Capital cost modeling is critical, but if you have not included the costs to operate and maintain (OpEx) your business-critical facilities infrastructure, you have severely shortchanged the overall process of effective business planning.

There are two critical components required to build data center OpEx cost modeling—the maintenance costs and the operating costs. The maintenance costs are the costs associated with the proper maintenance of all critical facility support infrastructure. They include but are not limited to OEM equipment maintenance contracts, data center cleaning expenses and subcontractor costs for remedial repairs and upgrades. The operating costs are the costs associated with daily operation and on-site personnel. They include but are not limited to staffing levels, personnel training & safety programs, the creation of site-specific operations documentation, capacity management, and QA/QC policies and procedures. If you have failed to calculate a 3-7 year operations and maintenance (O&M) expense budget, you cannot build a return on investment (ROI) model that supports smart business decisions

If you are planning to build or expand a business-critical data center, your best approach is to focus on three basic TCO parameters: 1) capital expense, 2) operations and maintenance expense, and 3) energy costs. Leave any component out, and you will run the risk of creating a model that does not correctly align your organization’s risk profile and business expenditure profile. If you are making a decision about whether to “buy” (use of collocation/hosting) or do an internal build, the risk of not taking this TCO approach is magnified significantly.

Another common mistake is the estimate itself. Financial requests made to boards of directors for capital to expand or build a data center are often too low and result in failure. The flow of decision-making looks something like this:

• The capital request is made and tentatively approved. Financial resources are allocated to investigate, capture and create a true budget.
• Time is spent driving the above budget process.
• The findings reveal that the initial budget request is too low.
• The project is delayed. Careers are impacted, and the ability to deliver service to internal and external clients and prospects is impacted.
• This takes you full circle, back to the # 1 Biggest Mistake: Failure to take the TCO approach and build a holistic financial model.

Cost to build issues can be easily avoided, but are destined to fail if you fall into trap #3

“Organizations with critical capacity requirements in the 1-3 megawatt range may fall into this risk category” – Mike Manos, Industry Expert

There are two missteps that can put your organization in the overspend death spiral. First, everyone wants a Tier 3 design, but not everyone needs one. Second, most visions of kilowatt per square foot or rack are not supported by actual business requirements. Too many times, the “must have 300 watts per square foot” approach may not be justified. Don’t overbuild; it is a waste of capital. Higher tier facilities also lead to higher O&M and energy costs. This sets the entire foundation for a proper business model and ROI off-base. Establish the right design criteria and performance characteristics first. Then build your capital expenses and operational expenses around it. Make sure to get your design criteria right and your financial model set prior to visiting the board of directors. For more information on design parameters see White Paper 142, Data Center Projects: System Planning.

Organizations often start searching for the perfect space to build before having their design criteria and performance characteristics in place. Without this vital information, it doesn’t make sense to spend time visiting or reviewing multiple sites. This typical “cart before the horse” scenario happens most frequently with users in the 1-3 megawatt range. While mega users are usually experts in this arena, and take into consideration power availability and cost, fiber, geographic issues such as earthquakes, tornados and flood plains, etc., baseline users often have business models that dictate a need to build or renovate a shell in their core region of business. The problem with selecting a site prematurely or based on narrow geography is that the site often cannot meet the design requirements. For instance, having your data center two floors below your high-rise office or even two blocks away is convenient, but business-critical data centers require a long list of site criteria that usually cannot be met in a multitenant space without significantly higher build costs or limiting space for future expansion. White Paper 81, Site Selection for Mission Critical Facilities, provides more information to help avoid this big mistake. Some organizations base their site search criteria on the amount of raised floor required to house their critical IT infrastructure. This can lead to the next big mistake

“While the physical design of a datacenter is critical, how a site is operated and maintained plays a more significant role in achieving site availability” – The Uptime Institute