Foreword

We are delighted to launch the 2018 edition of our data centre cost index (DCCI), the industry’s only cost index specific to data centre construction. Now covering 32 markets, we have chosen to share the index results, as well as an indicative construction cost per watt (US$/w) for each location. This is further supplemented by a separate parametric cost for shell and core construction in each location, with an accompanying index.

The results are taken from our new proprietary data centre cost model, made possible by the scale of our global footprint and local expertise. Our regional teams collaborate with local economists and experts to analyse input costs of a typical greenfield 30MW data centre. Consistent with the 2017 index, its usage is intended to be relevant to enterprises, cloud service providers and colocation operators.

In the build-up to the launch of this publication, we conducted a market survey to understand the challenges impacting the industry. Combined with our market knowledge and research, we provide you with a summary of the market trends of 2018 data centre construction and what to look out for in 2019.

Large-scale investment

2018 has seen large-scale investment – globally – prioritised throughout the European continent. This was fuelled by a mixture of General Data Project Regulation (GDPR), Internet of Things (IoT) and the relative late adoption of cloud services in the region compared to the USA and Asia.

That’s not to say the other marketss are quiet, hyperscale development is at a record high globally, with no visible sign of it slowing. 

New technologies and risks

Consumers continue to demand more and emerging markets will keep growing –

The number of people in India consuming data will double in the next three years

said Uday Sodhi, head of digital business at Sony Pictures Networks India.

Artificial Intelligence (AI), machine learning and IoT have landed, and 5G will take things to the next level by enabling autonomous cars, drones and ships and helping to create truly smart cities.

But there are risks and threats to the digital economy. The biggest threat to market is, perhaps, the strain on existing power infrastructure, posing the question, can it cope?

And is the skills shortage here to stay? Trade labour apprentices are down in most developed economies, raising the question, is the industry doing enough to attract the next generation to become skilled tradesmen?

Market intelligence

Our market survey highlighted the pressure and opportunities in the industry. Key highlights include:

believe that the data centre construction industry has been able to meet industry demand in 2018

feel that the current data centre construction market conditions have not caused/are not causing price inflation

feel that schedule/programme certainty is more important than cost certainty to owners/operators in today's market

believe there are sufficient consultants and/or contractors with data centre experience

expect data centre construction demand in 2019 to be greater than in 2018, with 13% unsure/ neither agree or disagree

The trends, from free text responses, suggest that the biggest threats to Data Centre construction output demand in 2019 are:

Supply chain capacity (contractors and equipment vendors)

Skills shortages (professionals and trade-contractors)

■ Power and land availability, planning issues

Market conditions driving cost inflation/escalation 

though opinion is divided as to whether companies that collectively make up the data centre construction industry are doing enough to train/develop staff:

  • 50% say they are not
  • 28% say they are
  • 22% are undecided

We are confident that our DCCI will become a reliable industry benchmark for those involved in data centre construction. If you’d like to determine an estimated outturn cost for your specific project, or to contribute new market information to our model, please get in touch, we’d be delighted to hear from you. 

 


This content is part of the Data centre cost index 2018

Go to the main Data centre cost index 2018 page