In Part 1 of DCD Intelligence’s investigation into modular data center costs delved into the growing popularity of modular design for data centers and planning and preparatory costs. In Part II, we look at deployment, operational and decommissioning costs.

Deployment costs
Deploying a data center involves equipment-related costs (such as hardware and software), as well as the cost of installing and commissioning the facility. Although it is often stated that modular facilities are faster and less costly to deploy than the same physical equipment needed for a traditional facility, the actual hardware and software that comes with a modular facility is typically more expensive. This is because it is delivered to end users already fully assembled and integrated.

Hardware and software costs include physical infrastructure of mechanical and electrical rooms and management software and control systems. Some vendors say these infrastructure costs are around 40% higher for facilities modules because of the cost of additional materials (including the container shell), and because the cost of pre-assembling and integrating the hardware and software components is included in the modular price tag.

By contrast, the installation costs associated with traditional facilities are typically said to be considerably higher than their modular alternatives. These include:

Shipping – In theory, it is considerably less expensive to ship a pre-assembled module compared with transporting various parts of a traditional facility. But much depends on the deployment location and physical distance between site and point of modular manufacture. Hidden shipping costs include loss or damage that can occur during transportation. Damage can occur even though there is less opportunity when modules are shipped pre-assembled. This could require the entire module to be reshipped. The shipping of modules can also be affected by legal restrictions on length and width.

Hardware assembly – Modular and traditional facilities have components that need to be unpacked, checked, assembled and integrated with one another and with the new data center environment. The fewer physical components involved in modular deployments means that the number and complexity of tasks are significantly reduced.

Software integration – In contrast to traditional facilities, which require integration, programming and optimization of software management systems to be done on site, modular facilities arrive with management software and controls already pre-installed, programmed and optimized. As with data center hardware, elimination of (potentially complex) on-site assembly work means installation costs can further be reduced.

Project management – Pre-configured designs mean the installation process is significantly less complex. In addition, deployment of the entire physical infrastructure will be managed by one provider. Reduced complexity results in simpler and less costly project management.

Commissioning – In the case of traditional data center deployments, several final processes must occur before the data center is considered ready for operation. These include various testing procedures and documenting and validating activities needed to establish quality assurance and quality control. The pre-integrated nature of facility modules means many of these final checks and tests are unnecessary. In addition, pre-testing occurs in the factory, further eliminating the need for on-site checks.

As well as the direct costs involved in deploying and commissioning a new data center, any attempt to evaluate the relative costs of a modular deployment with those of a traditional facility should consider the possibility of unpredictable costs arising, as well as the costs associated with ‘time-to-market’. Unpredictable costs include the impact of difficult weather conditions on data center assembly and installation, as well as the need for additional, unexpected site work.

Operational costs
Operational costs refer to all costs involved in running a data center on a day-to-day basis – from energy to the operator. Many end users claim modular facilities allow them to lower energy costs significantly. Improved energy efficiency in a modular scenario is achieved partly through the more efficient use of data center space, and partly through the technology incorporated in the modules themselves.

One problem that commonly arises in the case of traditional deployments is overcapacity. Data centers are built with more IT and white space capacity than they require because of the need to accommodate future technological changes and growing demand for additional IT resources whose rate is hard to predict. Overcapacity means energy is used to power and cool empty space and underutilized facilities.

Modular facilities overcome the problem of overcapacity by allowing end users to deploy capacity as and when required. This allows end users to significantly lower energy bills by eliminating the need to power and cool empty space. In addition to the energy-related cost benefits associated with modular’s ‘pay-as-you-require’ business model, reduced energy consumption results from the inherent technology of the modules. Several features should be noted:

Efficient design – Modular solutions are designed to ensure more efficient use of space, with features promoting greater energy efficiency, including sealed walls, floors, doors and under-floor or overhead cooling systems. Greater density also means modular facilities can achieve a significantly higher Power Usage Effectiveness (PUE) – as low as 1.1 to 1.4. (Although greater energy efficiency is not the same as reduced costs, more efficient energy usage should ensure bills do not rise at the same rate as energy consumption.)

Cooling optimization – Modular data centers are designed with advanced cooling systems built into the structure of the module itself. Modules typically feature air-side economizers, which facilitate the use of natural (outside air) cooling. In addition, many modules are equipped with the ability to use evaporative cooling. This eliminates the need to provide a chilled water supply.

Systems management – A growing number of modular data center products are available with integrated data center infrastructure management (DCIM) software. This gives operators full visibility into all of the data center’s critical components, including whether energy is being used efficiently.

In addition to helping data center operators cut the cost of their energy bills, it is possible that modular facilities lower maintenance costs.

Vendors and proponents of modular data centers often argue that the standardized nature of modules allows the use of universal maintenance programs. In addition, reduced complexity because of standardization should ensure data center operators can cut maintenance times and allocate fewer numbers of (potentially more costly) specialist staff to resolve issues.

The pre-engineered and pre-integrated nature of modules makes it more likely that only one vendor will be responsible for the majority of maintenance issues that arise. Despite this, there are reasons why maintenance costs could be higher in the case of modular data centers. These include the fact that maintenance may have to be carried out in tighter spaces and that modular designs could result in several components failing simultaneously. Having a maintenance contract with a single vendor does not guarantee lower maintenance bills. Maintenance fees may vary considerably between different providers, and the proprietary nature of modular products means that operators are unable to shop around when it comes to maintenance issues. 

Decommissioning costs
Although data center design, deployment and operational costs represent a lion’s share of any TCO model, it is important to consider what happens to the data center once it has fulfilled its useful purpose and needs to be retired.

Decommissioning a traditional data center involves the removal of cabling, disabling of fire suppression systems, draining of chilled water systems and disposal of hazardous waste.

An operator will likely have different contractual obligations to manage for termination. These include building leases, contracts governing specific pieces of equipment and agreements with utilities such as power, water and communications service providers. Unless the timing by which these contracts are unwound is carefully coordinated, a data center operator could face additional unwanted costs.

Other risks associated with the decommissioning process carry potential costs, including theft or looting from a partially decommissioned site and the consequent need to pay for extra security. They also include penalties that could arise from failure to comply with local recycling and waste disposal regulations.

In the case of modular data centers, many of these decommissioning costs can be avoided or minimized. Although there is still a need to manage the termination of contracts with utilities, and in some cases leases with real estate firms, fewer physical dismantling processes are required to decommission a modular facility. This is because the module is dismantled and removed from the site as an integrated unit. Although the need to pay for additional site security can arise, the amount of time for which security is needed will likely be less. This is because of the shorter timeframe required to dismantle the site.

It’s crucial that operators consider the range of costs associated with the entire lifecycle of a data center – from planning and design through to retirement. A TCO approach should consider direct and indirect costs. Direct costs include the design, procurement and deployment of equipment and costs involved in powering, staffing and maintaining the data center. Indirect costs include those accumulated due to complications, unforeseen events and unanticipated problems.

Many situations that create indirect costs can arise, regardless of whether a modular or traditional route has been chosen. Indirect costs also include those that arise due to a longer time-to-market with a new deployment. The longer an organization has to wait to get a new facility up and running, the more likely it is to accumulate costs due to lost business. A shorter time-to-market means organizations are able to reap the financial benefits of a new facility sooner.

You can read the full article in FOCUS 32. See the digital edition here. DCD Intelligence recently released a whitepaper titled Assessing the Cost, Modular Vs Traditional Build, undertaken with modular data center providers IO, Colt and Gardner. You can find out more about the report here.