Total Cost of Ownership: An Executive Overview
By: Julius Neudorfer
Originally Posted on Data Center Knowledge June 19th, 2012
Total Cost of Ownership “TCO” is basic and easy to calculate; just ask any first year economics or business major. Nonetheless, the true TCO of the data center is somewhat more elusive to project accurately. There are many subtleties, which can be overlooked or are simply unaccounted for (or perhaps underestimated), over the operational life of a data center. This Data Center Knowledge Executive Guide Series of articles will examine the many aspects of TCO, such as energy costs and operating efficiency, as well as other data center specific issues.
Like any other TCO analysis, there are the more obvi¬ous directly identifiable line items, such as initial capital investment and depreciation; however, the TCO of data center has many more elements, some of which are far more complex. Let’s start by defining and understanding the basic factors of TCO calculations.
Whether you decide to build, lease or buy a data center, before you can compare and calculate TCO, it is important to understand and clarify the specific terms of the data center industry:
- Total Space (Building Shell)
- Whitespace (Raised Floor)
- Effective Usable Space (Rack Space)
- Adjacent Total Lot Size (raw lot size)
- Critical Load Power Capacity
- Power Density
Unlike other commercial real estate purchases or leases, the raw square footage of the data center Building Shell is a relatively minor factor in the overall TCO calculation. The more frequently used basis is “whitespace” which is a common industry term for the raised floor area where the computing equipment resides. However, be sure to not limit your TCO space evaluations just on “whitespace” alone. It is the net usable footprint that is available for the computer equipment, the majority of which is housed in racks or cabinets. The effective usable rack space is less than the whitespace and significantly less than the gross building shell space.
To read the entire article in its entirety or to download the entire Data Center Knowledge Executive Guide on Data Center Knowledge TCO, courtesy of Digital Realty, click here.