Building and Financial Considerations When Selecting a Data Center Site

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Last month I wrote about the importance of data center site selection, which was top of mind in the wake of October’s Hurricane Sandy. Since then we’ve been hit with a blizzard here in the Northeast that brought high winds, dumped more than 2 feet of snow in some areas and caused significant flooding, all of which once again brings the topic of data center site selection to the fore.

I recently wrote a white paper on this topic that covers the various categories of risk associated with selecting a data center site, which fall into three general categories:

• Geographical risks, such as likelihood of natural disasters
• Building characteristics and constraints, such as the age of the building and quality of the facility
• Local risks relative to the municipal infrastructure, environment and employees

In last month’s post I covered the local risks so this time I want to focus on building characteristics as well as some financial considerations.

The data center building has a huge impact on the availability of your business. You need to look at factors such as compliance with electrical laws and standards, the age of the structure, types of loads you’ll be running, and the type and quality of the facility.

It’s really not enough that a building is built to code; that’s simply to help ensure the safety of its occupants, not necessarily to guarantee high performance. If you’re looking at a new facility, check out its insurance rating – that will tell you a lot about its structural soundness.

Beyond that you’ve got electric safety codes to consider, such as the National Electric Code in the U.S. That covers the basics, but for a data center you’ll want to ensure compliance with the IEEE performance wiring standard that considers sensitive electric loads such as computing devices and recommended practice for how best to power them. Be aware that older buildings often only comply with the safety codes; at a minimum you want to ensure the building also complies with IEEE standards.

Additional risks apply to data centers located within a larger building. You don’t want it located under a kitchen, for example (too much risk of a water leak) or in a basement, as we learned during Hurricane Sandy.

If your data center is located in a multi-tenant site, also consider the risks your neighbors pose. A fire or security breach in a neighbor’s offices can quickly become your problem. If the building offers a service level agreement, make sure the agreement is in line with your business’s objectives and the infrastructure fault tolerance it demands.

In terms of financial considerations when selecting a data center site, the two big ones are energy cost and tax incentives.

You can estimate your annual energy cost with the following formula:

Annual Energy Cost = IT load × Annual PUE × Electricity rate × 8760 hrs (which is one year)

As you can see, a lower PUE will mean a lower electric bill, and climate has a lot to do with PUE. Cold, dry weather means less energy consumed to cool the data center and more hours during which you can use economizer mode, or even turn off compressors and chillers. (To learn more about free cooling check out this post or see white paper 132, “Economizer Modes of Data Center Cooling Systems.”)

The other big variable in that equation is the electricity rate, which varies by region across the country and according to the power source. For instance, coal, nuclear and water power are less expensive resources to generate electricity than gas, solar, and wind in most states. Be mindful, however, that a carbon tax may chew away at those savings, so check to see if that applies – or is likely to in the future. Also, electricity is generally more affordable in industrial areas than in commercial locations, even within the same region.

Finally, many states offer tax incentives in exchange for corporate investment and job creation. It’s worthwhile to initiate negotiations with local governments or economic development agencies during the site selection process to see if you can extract any such incentives.

To learn more about the various risks you should consider, check out APC by Schneider Electric white paper no. 81, “Site Selection for Mission Critical Facilities.”