Study: Data Center Construction Costs Are Down

Current economic conditions have some benefits: on average, it costs less today to construct a new data center than it did in late 2007, according to a study by Environmental Systems Design (ESD).

In today’s economy, owners are likely to find significant savings on labor, data center equipment and building materials and the transportation of building materials and equipment. Most notably, ESD found that the prices of feeder and cable have dropped by more than half, major data center equipment by 12 percent, labor and materials overall by 19.6 percent, and shipping and handling by 15 percent from the fourth quarter of 2007 to July 15, 2009.

“Our analysis shows that for any company anticipating the need to build or expand a data center, there is currently a window of opportunity to realize considerable savings,” said Raj Gupta, president and CEO, ESD.

ESD compared live project estimates, using as a baseline contractor bids for a 60,000-square-foot greenfield data center comprising 20,000 square feet of raised access floor area at 150 watts per square foot and 10,000 square feet of office space, with the specific criteria for uptime and redundancy.

During the study period, ESD observed significant reductions in the costs of copper cabling (55 percent); feeder, both overall (55 percent) and for copper (48 percent); copper-based utility transformers (19 percent); and steel joists (18 percent).

In contrast, ESD found that the price of UPS systems; heating, ventilating and air conditioning (HVAC) equipment; and precase tilt-up concrete building systems are stable, and the market for medium-voltage switchgear remains competitive, although prices have dropped 4 percent.

Similarly, the study showed that prices of other equipment have remained stable, while delivery schedules have significantly changed for better or worse. For example, the price of batteries fell 3 percent, but delivery schedules remain long. The price of generators has fallen 8 to 12 percent, but delivery schedules are 40 percent shorter (40 percent).

The estimates are based on historical data, which are continuously updated based on actual bids on data center infrastructure equipment. ESD records historical trends for large equipment purchases, labor costs and delivery schedules. In addition, the company considers geographical markets for construction materials and labor using figures from RS Means and other industry benchmarks. Since September 2008, in particular, ESD has closely monitored the pricing and delivery of major data center infrastructure components in recognition of the need for possible reductions due to the economy.

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