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Examining the cost implications of prefabricated and traditional data centre builds

Fri 13 Sep 2019 | Wendy Torell

Wendy Torell, Sr. Research Analyst, Data Centre Science Centre, Schneider Electric Secure Power Division, calculates the costs

As data continues to grow inexorably, driven by the digitisation of public services, the increase in streaming and the emergence of new Internet of Things (IoT) applications, many businesses have migrated towards a hybrid data centre and cloud-based model with its promise of low-cost, reliable and scalable functionality.

As such, many data centre operators need to deploy new resources quickly and reliably in order to meet increased demands and to do so in a manner that is both measurable and transparently cost-effective.

The increasing modularisation and standardisation of hardware, that includes pre-integrated servers, storage and networking combined with uninterruptible power supplies (UPS), cooling, racks and Cloud-based Data Centre Infrastructure Management (DCIM) software, has both simplified and increased the speed of deployment for such operators. At a more fundamental level, however, the decision of how best to add new capacity can present a challenge.

For many of today’s cloud and colocation service providers, a primary consideration is whether to invest in an entirely new facility or to upgrade and retrofit an existing building.  Such a decision will involve various technical and financial considerations in order to determine which is the best solution to solve the organisations challenges.

An alternative to building an entirely new facility is to opt for a prefabricated data centre solution, allowing the user to add capacity, whether in power, cooling or IT increments, to spaces both inside and out of a building. For a colocation provider, this presents a unique opportunity to scale up quickly, in some cases in as little as 12-24 weeks, or indeed add power provision and free up new white space to increase revenue generation.

The benefits of prefab

Prefabricated data centres are pre-engineered, pre-assembled and pre-tested systems and can comprise racks, chillers, pumps, cooling units, power infrastructure—including switchgear, transformers, power distribution units (PDUs) and uninterruptible power supplies (UPS), all delivered in its own container.

The size can range from smaller micro data centres used to meet the demands of edge computing and which in some instances, can be wheeled into any available corner or office space, to larger prefabricated building blocks, that can be delivered on the back of a lorry to the top of a building or a car park.

There are, of course, many trade offs to be considered when choosing the prefabricated or traditional brick and mortar approach. The benefits of opting for prefab are many, speed of deployment is an obvious one as building a data centre from scratch can take up to two years, depending on size, complexity, local planning issues and design constraints. Opting for a prefabricated, approach can also save as much as 50% of the design/engineering time due to the modules being built and tested prior to deployment. Here much of the integration required to ensure all subsystems operate together effectively is completed prior to delivery and repeatable, if required.

Furthermore, with prefab, many tasks can be completed in parallel to save time.  For example, if any site preparation is needed, it can be undertaken while the modules are assembled in the factory, reducing overall time to deployment.

Additionally, the cost and efficiency of prefabricated modules is far more predictable than traditional built data centres. Prefab enables customers to specify, and the manufacturer to publish, expected efficiencies based on real measurements. Whereas unforeseen site issues can often impact the potential efficiency, thereby necessitating redesign, resulting in slower deployments and higher costs.

“For many of today’s cloud and colocation service providers, a primary consideration is whether to invest in an entirely new facility or to upgrade and retrofit an existing building”

Prefabricated data centres also offer greater flexibility both in terms of portability and finance. If a lease expires, for example, it can be a relatively simple effort to transport a fully functioning data centre to a new location. From an accounting standpoint, prefabricated modules may be classified as ‘IT equipment’ rather than a ‘building’, which might, depending on local regulations, deliver taxation and insurance benefits. There is also the flexibility gained from treating such a financial outlay as an operational, rather than capital, expenditure, avoiding the inhibition of “sinking” costs into a permanent site.

However, there are also some instances when the prefabricated approach can be less than ideal. One must consider previous and planned investment in an existing data centre. If there is available space or stranded power and cooling capacity, then it may be best to exploit its use rather than invest in new prefabricated capacity. If one is adopting a hybrid approach by adding prefab modules to existing infrastructure, proximity of the new equipment to the installed base can also be important. Distance can add the need for extra cabling, ducting and switchgear, all of which increases cost.

Digital TradeOff tools enable transparency around cost implications

A data centre planning tool from Schneider Electric can assist data centre operators when making the choice between prefabricated and traditional data centres. Aptly named the Prefabricated vs Traditional Data Center Cost Calculator, it provides a simple means of making an estimate of the better, or more cost-effective approach. Not intended to provide a detailed quote of exact expenditure, it provides a rough order of magnitude, accurate to within 20%, of the costs that might be expected.

As such, there is no one right answer. Sometimes prefab provides the lower cost approach, and sometimes traditional will be more effective.  Factors such as the starting and ending load, power density, space, where modules would be placed (indoors vs. outdoors, for example), and cooling architecture all influence the answer.

The tool incorporates estimates for equipment pricing from Schneider Electric and other vendors, as well as costs for labour in various geographies to account for the inevitable construction and integration costs incurred. As such, it allows the operator to investigate the implications of choosing a completely prefabricated data centre (which would include power, cooling, and IT modules), a traditional build, or even a hybrid approach in which only parts of the data centre, such as power or cooling, are prefabricated.

The user can examine the cost implications of choosing between a variety of cooling architectures including a traditional water-cooled chiller plant, a packaged chiller plant with prefabricated hydronics, or an indirect air economiser.

A variety of rack densities can also be examined, varying between 1 and 20kW/rack. This has great implications for the overall cost, especially where space is at a premium, because the lower the density per rack, the more real estate one requires.

There are trade-offs between placing new modules indoors or outdoors. The former option may be more expensive in terms of real estate but depending on prevailing weather conditions, the need for a weather proof housing may push up the cost of placing new capacity outdoors.

Finally, whether or not one owns the site on which the data centre is located will determine whether the space cost becomes a measure of capital or operational expenditure. The calculator provides a summary of the capex of traditional vs. prefabricated and demonstrates the percentage difference graphically.

A more accurate cost estimate requires decision makers to drill down into the finer details comprising the specific costs of equipment, real estate and labour. However, the easy to use and freely available TradeOff tool gives an excellent overview of the likely costs and helps to narrow down the options before detailed investigation is undertaken.

  • The Schneider Electric Prefabricated vs Traditional Data Centre Cost Calculator can be found online.


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