The Soaring Costs for New Data Center Projects

miller60 writes "The cost of building a quality data center is rising fast. Equinix will spend $165 million to convert a Chicago warehouse into a data center, while Microsoft is said to be shopping Texas sites for a massive server farm that could cost as much as $600 million. Just three years ago, data centers were dirt cheap due to a glut of facilities built by failed dot-coms and telcos like Exodus, AboveNet and WorldCom. Those sites have been bought up amid surging demand for data storage, so companies needing data center space must either build from scratch or convert existing industrial sites. Microsoft and Yahoo are each building centers in central Washington, where cheap hydro electric power from nearby dams helps them save on energy costs, which can be enormous for high-density server installations."

Comments

I don't buy it.

[tsstahl]

I have to call bull****.

Sure, you can spend whatever you want, but should you?

If you are playing in this space it seems profitable. FTA "generate approximately $80 million in annual revenue, and cash gross profit margins of approximately 70 percent."

So, spend 2 years of revenue in construction, reap great profits over it's 10-12 year minimum life.