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Why Your Data Center TCO and Location Matter

By Vangie Beal, CIO
November 19, 2012 11:00 AM ET

CIO - Selecting a good location for your data center is a critical element of data center planning, as deciding where to build and maintain a facility directly impacts the total cost of ownership (TCO) over the lifetime of the data center.

In looking to either purchase an existing facility or build a new data center, there's an exhaustive list of factors to be weighed and analyzed before you select a site. To that end, CIO.com spoke to industry leaders to learn more about considerations that range from the probability of basing your data center in an area where a natural disaster could occur to the availability of utilities and the cost of energy.

Key Data Center Location Considerations: Expenses, Expenses and Expenses

According to data center solutions provider Lee Technologies, a subsidiary of Schneider Electric, one basic mistake organizations make is failing to take TCO into account. In its report, The Top 9 Mistakes in Data Center Planning: The Total Cost of Ownership Approach , Lee Technologies recommends that the best approach to is to focus on three basic TCO parameters: capital expenses, operations and maintenance expenses, and energy costs.

News: New Data Center Design Boasts "World's Most Efficient Cooling System"

Keith Lambert, senior vice president of design, build and construction for Lee Technologies, says the company looks at potential sites for clients looking to build new or retrofit an existing structure. Depending on the organization's needs, there's a number of different ways to approach site selection.

The TechVault data center in Vermont deploys Schneider Electric equipment. (Image credit: Tom Way Photography)

"We're mainly interested in site selection if there are tax incentives in the area-and only if they are true incentives," Lambert says. Many communities, especially those in rural areas, offer incentives aimed at attracting investment and creating jobs in construction as well as information technology.

Utility costs matter as well, Lambert adds. "For example, we want to know the cost of water per gallon, the electricity rate and also the cost of [sewer] discharge."

There's also real estate, infrastructure, materials and labor. At the moment, says David Eichorn, data center practice head for Akibia, which offers services to improve the availability, reliability and performance of data centers, Oregon is a popular data center location. That's due to a combination of a highly skilled labor force, favorable climate and lower cost of living than, say, neighboring California. (For many of the same reasons, Canada is also attracting the attention of firms looking to build a data center.)

Finally, during the site selection process, it's critical to examine network connectivity in the area and find out how close to the facility it runs. Depending on the complexity of the site and redundancy levels, the availability of multiple power sources may be a key factor for some companies.

Don't Let Energy Costs Overwhelm Your Data Center

Power doesn't come cheap. Rob Woolley, senior vice president of critical environment services for Lee Technologies, says energy costs-and the types of deals you can get from various providers in the area-have become increasingly important over the past 10 years.

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