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How Much Does It Cost to Build a Data Center?

Data Center Business

It will cost you about $1000 a square foot to build a small data center. That’s not taking into account that it can often cost in excess of $10,000 per mile that it takes to have fiber installed to reach your location.

The average enterprise data center costs between $10 million and $12 million per megawatt to build, with costs typically front-loaded onto the first few megawatts of deployment.

Rapidly developing technology and the changing needs of business have forced companies to make very crucial alterations to their infrastructure.

Data centers are known to support companies and help them meet IT requirements, should companies decide to hire them.

Data centers are also in charge of data backup and recovery, as well as networking. These centers also host websites, manage emails, and instant messaging services. They support cloud storage applications and e – commerce transactions.

Even online gaming communities require data centers to manage their online activities. Modern business owners are in constant need of reliability when it comes to maintaining smooth operation.

One benefit of a Data center is those facilities are built to withstand a 24/7 service easily. However, the components require a significant amount of infrastructure support in both hardware and software areas.

These include power subsystems, stable and uninterruptible power supplies, proper ventilation, high – quality cooling systems, fire suppression, reliable backup generators, and connections to external networks.

7 Factors That Influence the Cost of Building a Data Center

For anyone looking to build a data enter in the United States, below are a few of the major cost categories to consider:

1. Upfront planning, design and commissioning

Data Center Design With Server Control Room and Generator Layout

This will be the first expense you encounter when looking to build a data center. This cost account for a significant portion of the upfront costs of building a data center, expect 20 to 25 percent of the total upfront construction cost.

2. Base building, shell and property

Data Center Design With Multilevel Server Room Layout

Unlike before, where data centers are just one big supercomputer, modern aged data centers functions using multiple servers to optimize further and boost its processing power. Now data centers consist of thousands of potent and tiny servers that run non – stop around the clock.

Nonetheless, these serves and computers need a location to function. Experts estimate that the cost of building the data center shell, including the physical security is $200 per square foot.

3. Fire suppression and detection

Data Center Design With Server Room Layout

The sole reason for data centers is to protect and store data. These data needs to be protected by all means and that’s the reason why fire suppression and detections devices are mandated for data centers in the United States.

The complex and specialized fire suppression systems cost between $20,000 and $60,000 for a several thousand square foot data center.

4. Building permits and taxes

Every business in the United States needs to fulfill some legal obligations before it can start transacting. To avoid being on the wrong side of the law, entrepreneurs are advised to first research and seek clarification about their legal needs before starting a data center.

Note that the costs will vary significantly across the U.S., but for the sake of this article, estimate is around $70 per square foot in building permits and local taxes.

5. Data Center Infrastructure

Data Center Design With Server and Battery Room Layout

Have it in mind that a bulk of the startup cost is in the purchase and installation of mechanical equipment (computer room air conditioning units, refrigerant loops, condenser plant or chillier, etc.) and electrical equipment (power distribution costs, transformers, patch panels, UPSes, auto transfer switches, generators).

However, depending upon your desired level of resiliency, the cost for the mechanical and electrical can range from $7K to $20K per kW of IT load.

6. Network connection cost

Data Center Server Room Design

A data center has multiple Internet connections for redundancy and bandwidth. They’re distributed among the customers’ equipment.

The total bandwidth needs to be enough to keep servers moving at a good rate even during periods of heavy usage. For the sake of this article, estimate the fibre cost to be around $10,000 per mile upfront.

7. Power

Note that the greatest expense of a data center is power, which accounts for 70 percent to 80 percent of the overall cost of running a data center facility. Data centers house servers and storage devices offering virtual and physical security.

The data center should be well – equipped with uninterrupted power supplies, which if interrupted should be dealt with by backup power generation capabilities.

Although the cost can be highly variable, we estimate the average industrial power rate of $00677 per kWh in the United States.

8. Data center staffing

Data Center Network Operation Center and Control Room Design Layout

After power, 24 hours 7 days 12 months staffing of a data centre is the largest expense and will cost in the hundreds of thousands of dollars per year.

Also, set – up charges cover the installation and connection of equipment, and later changes to the layout may have associated costs.

9. Annual facility and infrastructure maintenance

On average, expect a base cost of 3 percent to 5 percent of the initial construction cost as maintenance and ongoing cost.


The business world is moving at an incredibly fast pace that matches the overwhelming demand for information. Note that with the ever – changing requirements of the modern business model, many companies place their confidence in data centers, as these facilities play a crucial role in reaching their IT specifications.

Data centers these days are more than just a safe and secure facility with space that is equipped with reliable power, and network. They are becoming a valuable addition to many businesses as they prove to be a dependable extension of their IT team.