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  1. #26
    Join Date
    Jun 2005
    Posts
    2,752
    I guess your question was answered by Karl Zimmerman:

    Compare apples-to-apples, of course if you're looking for a facility that is converted office space with thrown together used gear put together by a guy who has never done it before you're going to be less than $1k a cab, so why compare $1k a cab in a proper facility to what you can just throw together?
    You will only find out how good a provider is when the going gets tough

  2. #27
    Quote Originally Posted by swiftnoc View Post
    You forgot one important aspect, capital. Obviously investing capital in building your own datacenter will hurt investment on other aspects of your business. The true questions i would ask myself is:

    1.
    Would investing in my own datacenter save me enough, to compensate for the loss that i incurr by not investing that capital in my core business?

    2.
    Do i have enough knowledge and experience to run a datacenter?

    3.
    Is it worth the risk?
    Very true. But at least I would know it's something to investigate, vs not bother with at all.

    Thanks everyone for their replies. I guess the answer to my original question is "maybe / probably" insofar as does the cost per rack go down as you rent more of them. Would have hoped for a more solid indication of the amount it goes down, but I'll take what I can get.
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  3. #28
    Join Date
    Apr 2006
    Location
    Phoenix
    Posts
    808
    PhoenixNAP is on SRP - in fact it was one of our design requirements. SRP is the unregulated non profit utility and great to work with.

    Lets talk a little math skip below if you don’t care about how I figured out the cost per cab:

    ***********START OF MATH********

    A smaller facility would be on the E-36 pricing plan. If you have your own dedicated feeds from the power station (notice the work dedicated) and use at least 300,000 KWH a month for 3 months you qualify for E-63 (what we are on).

    Let me pull an old E-36 bill and go through the charges there. (pricing comes from http://www.srpnet.com/prices/pdfx/BusE36May10.pdf)I am going to use summer charges (not summer peak which is MUCH more).

    As an example, lets assume a facility is using 200KW flat for the month.
    Monthly Service Charge: $25
    Demand (kW) Charge : ($4.21 * 250 = $1052) (its 250 because you will never flatline your power).
    Energy (kWh) Charge: (350kWh @ .0911 + 180kWh @ .0908 + 155kWh @ .0803 + 143315kWh @ .0589 = $8441.25
    Phoenix City Tax (2.7% * 9518.25 = 256.99)
    County and State Tax 7.3% 9518.25 = 694.83)
    Total = ~10470.07 for 200KW of power (total facility).

    PUE of 2.0 = utilized power of 100KW = 28cabs @ 3.5KW of utilized power (80% of 20x20 amp 120v circuits @ .9 PF) = $373 a cab for the base power bill.

    Moving on - assuming the same 28 cabinets @ 24sqft a cabinet doubled for M&E space - you need 1344sqft of just datacenter. You will need extra space for storage (extra filters etc) but lets say you just lay it on the datacenter floor instead of having special space for it.
    Floor space costs (leased) are about $16/sqft/year * 1344 = 1792$/month = 64$/rack.
    If we assume 350k (this is a low number for an N datacenter) in TI needed to turn it into a datacenter(even with used gear the install costs can be huge, one of our main distribution panels (we have 8 in the facility at build out) costs 425k to install it) spread over 7 years = $148.80/rack.

    So we have:
    $378 for power
    $64 for floor space
    $148.80 for equipment
    $590/month - however we still do not have: staff/maintenance/networking.

    The truth is you would already have some staff, however they are going to be needed to do additional work they would not already do. That time spent has a cost. Lets say you have a MINIMUM staff of 6 people who are each making $35k/year with a 1.3 multiplier for benefits etc. Your staffing would cost $273k/year, if 10% of their time was taken up by datacenter stuff you by not having your own datacenter you would effectively get a free .6 of an employee. Thus the cost of 10% of each of their time is 2.275k/month or $81/cabinet.

    As an aside here, people under estimate the amount of staff a datacenter takes to run. To give you an idea of what it takes to run a datacenter PNAP has: 5 full time facility people (4 electricians) and we are going to hire another here shortly; 3 Full time cabling staff (currently having to work OT); 4 full time janitors; 12 full time security people. That’s 24 people without the NOC staff responding to tickets.

    Networking - If you assume the building ALREADY has fiber to it (not that many do so this is a BIG assumption) 3k a month is a pretty good number for back-haul - / 28 cabinets = $107/cabinet.
    Cost of Money - if you made a $350k investment you could have made 5% just by putting it into an investment account, thus you have to take into consideration the cost of money. It works out to be about $50/rack. If you took a loan on the money, double that. Lets assume you have the cash though.

    Maintenance
    Remember you now need to replace batteries, filters, belts, condensate pumps, lights, breakers, compressors, and more. Let’s assume $2000 a month. Or $71/cabinet.

    So final totals are:
    $378 for power
    $64 for floor space
    $148.80 for equipment
    $81/staff
    $107/Networking
    $50/Cost of Money
    $71/cabinet.
    Total: $799/cabinet COSTS.

    ****************END OF MATH **************

    Now, let’s look at what you give up:
    You have to build a datacenter for a certain size, if you build it too small, you need to build a second facility to expand. If you build it too big, you spend significantly more capital/cost of capital/rent.
    You just spent $350k improving someone else’s building. When your contract is up, they are now leasing you datacenter space – not “gross office”.

    You are now responsible for every little hiccup. When you have to run the generators – you pay for the fuel. (to give you an idea, each one of the PNAP gens cost about $600/hour to run.)

    And the BIGGEST PROBLEM – You just moved out of a world class facility, to an N facility (not even N+1) all to save a whopping $100/month. If you only occupy 20 of the 28 cabinets, the only thing you save is the cost of the power. With just 8 cabinets empty, you are now paying almost $1000 per cabinet for an N facility which would work out to be MORE than you would pay to colo.

    Running your own datacenter will save you money, but not until you are at 1.5-2MW.
    Jordan Jacobs | VP, Products|SingleHop| JJ @SingleHop.com
    Managed Dedicated Servers | Bare-Metal Servers | Cloud Services

  4. #29
    Thanks for all the details Jordan. My original idea was "would anyone potentially offer a substantial discount? If yes, don't bother doing the rest of the math as it's not worth the time". I'm certainly happy to look at it the other way around, i.e. "Here's the math, which shows you probably shouldn't even consider it even at your current pricing". Much appreciated.
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  5. #30
    Join Date
    Feb 2004
    Location
    Atlanta, GA
    Posts
    5,662
    Quote Originally Posted by funkywizard View Post
    Thanks for all the details Jordan. My original idea was "would anyone potentially offer a substantial discount? If yes, don't bother doing the rest of the math as it's not worth the time". I'm certainly happy to look at it the other way around, i.e. "Here's the math, which shows you probably shouldn't even consider it even at your current pricing". Much appreciated.
    The short answer is, no, you aren't going to get a substantial discount at that level. There will be some, but not substantial.

  6. #31
    Quote Originally Posted by RyanD View Post
    The short answer is, no, you aren't going to get a substantial discount at that level. There will be some, but not substantial.
    Yeah, that's what I've surmised from all the posts here thus far. Thanks
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