AV5 engineers and technicians provide full scale of services to manage your Data Centers.
Starting a Company and Building a Data Center
When it comes to buildout a data center, there is no need to make a multi-million dollar investment or build high-rise towers. In theory, it’s possible to set up a data center on a floor space as small as 100 square meters in buildings, that have no windows (windows are not necessary for data centers).
The main requirement is electricity (thousands of servers consume a significant amount of electricity), broadband Internet, and air conditioning.
Data centers can be located in skyscrapers, offices, and even shopping malls around the United States. Post 9/11 evidence indicated the presence of giant data centers that occupied at least 20 floors of the collapsed Twin Towers.
Business model and financials
Now let’s talk financials. If you approach this business purely with an intention of renting (subleasing) a premise, this business model is ideal for you.
Consider this scenario: in an area of one square meter, you can install a rack, that holds 20 to 40 servers. You can rent the servers at prices ranging from $100 to $250 per month. In fact, for one square meter of space, you can generate $2,000 to $10,000 per month. What other business can generate a profit of $10,000 per square meter?
Of course, let’s not exaggerate. It takes considerable amount of effort to go from making a decision to build a data center to its full operation. It includes recruiting staff, purchasing servers, commissioning, etc. You need to invest in buying server equipment and racks, provide electricity, the Internet, hire data center administrators. As a result, an initial investment is high. But, even at the profit rate of $2,000 per square meter, the data center business is considered to be extremely profitable.
One of the biggest advantages of this type of business model is its excellent scalability. You can open a small data center with a floor space of 100 square meters (less space is not practical due to the overhead costs).
Alternatively, you can set up a data center on a 20,000 square meter floor. It’s not only about the servers, it’s about hiring the right people, which is crucial. Your team should be great at selling/renting to customers.
However, you can start with a small data center, and then expand as sales grow.
Technical details, building a data center
Let’s talk about the technical details, starting with building a data center. Some companies build data centers using a “build and cut” concept. They select buildings, handle retrofitting, communication wiring, cooling and installation of emergency generators in case of power loss from the city. We will be using this concept as an example.
The next step in setting up a data center is “slicing” it into pieces and allocating these parts to specific customers. Next, you need to install arrays of racks, contract Internet service providers, open NOC (Network Operational Center) and buy servers.
In today’s market servers became more affordable, costing between $2,000 and $5,000 if you were to purchase them new. Used units can cost as low as $100. Usually customers don’t mind.
Our company can lead you through the process of building a data center and answer all questions you may have.
We can assist you with:
Selection and rental of a DC placement
Install and Setup arrays of racks
Setup Power Supply
Contracting Internet providers
Create Network Operation Center (NOC)
Hiring the right engineer staff
Here are more details about data center infrastructure:
It can be just a regular building with increased requirements for ventilation and maintaining optimum temperatures.
Depending on customer requirements, you will need to install 40, 42 or 45-unit racks along with Power Distribution Systems (PDUs) for each rack.
Data center equipment needs to be connected to ISP to gain access to the Internet. For a newly built data center, it’s important to negotiate favorable terms with Internet providers. There are thousands of Internet service providers in the world. Before engaging in a negotiating process with selected ISPs, it is necessary to take into account the needs of data center customers.
You will need a variety of personnel with different specialized skills to support and maintain the data center: Power Supply and Cooling Technicians, Server Hardware Technicians, Server and network Engineers, Local Technicians for physical access to equipment (in case of breakdowns and/or installation of new equipment).
Depending on data center customer requirements, you can recruit server maintenance engineers who are based in the US or in Eastern Europe, for example, in Belarus.
The areas of a data center, that are temporarily free of server racks, should be rented out to vendors, that serve the data center, or as an office space to any company.
According to various estimates, the collaborative workspace industry is witnessing exponential growth. Therefore, utilizing your floor space as a combination of a data center and an office space rental creates conditions for a safe and diversified investment.
Stages of Data Center Build Outs
We offer our assistance in building Cloud and Data Centers in the United States. Moreover, you will receive business support at all stages, from writing a business plan to the final sale of the data center.
- Stage 1: Preliminary Preparation
- Stage 2: Data Center Installation
- Stage 3: Operation and Development
- Stage 4: Sale of Data Center
- Data Center site selection, utilizing AV5 contacts of commercial real estate experts, who specialize in data center properties
- Data Center positioning. Developing the right positioning strategy. The choice of target market segment
- Hiring of Sale Representatives, who have extensive experience in the field of data center sales and already have a client base
- Brand development for your data center. Promoting the new data center to AV5 partners in data center sales
- Hiring of technicians for the maintenance of the data center, preparation of premises and finalizing of all necessary contracts. AV5 has all resources in place to hire trustworthy technicians to whom private information will be entrusted.
- Drawing up the requirements and hiring engineers
- Writing a business plan
- Maintenance of business relationships between the data center and its customers, taking into account the agreement on the level of service provision
Data center installation after finalizing of all contracts:
- Data Center Design, Data Center map planning, placement of racks for servers, storage,and network devices.
- Rack installation, construction of a Structured Cabling System (SCS).
- Installation of power systems.
- Installation and customization of equipment (servers and network devices).
- Preparation of documentation
- Staff training.
- Gathering customer feedback on service quality.
- Periodic meetings of Data Center executive directors with directors of client companies.
- Ongoing marketing promotions and optimization.
- Monthly social events with decision makers from customer companies.
After establishing all business processes, acquiring customers and showing profits, the company’s value increases significantly. At this stage, you can consider selling the data center.
Due to the rapid growth of the data center market in 2017, there were 48 large transactions worth $20 billion.
In 2016, there were 28 transactions worth $10 billion and in 2015, 17 transactions worth $5 billion.