When calculating the Total Cost of Ownership in a wholesale or multi-tenant colocation environment, you will find many various cost and you’ll need to consider the following key cost drivers:
- Base Rent, Ramps and Annual Escalators
- Special area Utility Rate over the term of your lease/contract
- First year Sales, Use and Cloud Taxes
- Hardware and Software Refresh Costs and which hardware should choose
- Power Usage Effectiveness ratio
Let’s break down each one.
Base Rent, Ramps and Annual Escalators
In case of first start most wholesale colocation operators offer either a triple net or modified gross lease option based on the electricity (kW) your data center will consume.
You will most likely not be consuming all of the electricity your data center needs on Day 1. Instead, like most data center users, you will “ramp-up” over the term of your contract. This ramp period may impact the price you pay for electricity.
Typically, In the Dubai ad Turkey market, it is common to find modified gross base rent in the $8-$10/kW range with a 1-3% annual escalator.
Electricity rates varies greatly by market and can be influenced by the contractual agreements in place between the data center operator and the utility. Its important to understand the rate you will pay as you ramp up and over the term of your contract.
Electricity rates in the Turkey and Dubai market range from $.035-$.05/kWh.
Sales, Use and “Cloud” Taxes
Cloud Taxes is zero
Hardware and Software Refresh Costs
The cost to outfit a single cabinet with the necessary hardware (servers, storage arrays, network infrastructure, cabling, power distribution and surge protection) and software can range from $50,000 to more than $500,000. if we design and make integrated this cost drop 50%.
Power Usage Effectiveness
this is Uptime always 99% as standard.
August 4, 2021
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