Think about any hacker movie you’ve ever seen. Imagine the plucky underdog busting into the lair of the evil digital overlord, finding row upon row of server stacks blinking green, red, or blue in a labyrinth of humming towers. Slow-mo fight ensues.
While the visual effect of these types of scenes is to evoke something straight out of science fiction, those walls of physical housing for a digital atmosphere are definitely real. And each brick is representative of staggering acreage within the wireless realm.
And as in the physical world, online businesses are responsible for overhead costs such as leasing expenses and maintenance, which includes both actual square footage and virtual property. These leases were once relatively straightforward to calculate, but in recent years have gained significant complexity as data becomes increasingly based in the cloud.
So let’s talk about how modern data storage strategies are continuing to affect data center lease rates.
Data center leasing rates vs. digital leasing data
Let’s start this section with a definition.
A data center is a critical piece of operational infrastructure that supports the digital storage needs of myriad companies, both online and hybrid. If businesses are small enough, they may choose to run their own data center on-site within their office, however purpose-built external data centers provide a more scalable option for growing organizations. Very large companies often engage multiple data centers to address their data storage needs.
Data centers are also constructed with a number of physical fail-safes including readily available cooling systems, reliable power sources, and are even built with safety measures against natural disasters factored into their architecture. The idea is that, come what may, your company’s data will be safe.
So, when companies lease data storage their rent is calculated both in the physical realm as well as in bandwidth taken up by their processing needs. The digital leasing data of a given company can provide a significant insight into the organization’s operating power, expenditure, and scope of business.
What data center leasing rates look like
The data center as it exists today was first introduced by Digital Realty Trust et al in 2007. These early versions offered between 1.3 and 1.8 MW of power, distributed over 10,000 - 12,000 square feet of physical infrastructure. The going rate for 1 square foot of space was an annual cost of around $21.
New lease signings alone in 2021 represent an extraordinary increase from these humble beginnings for the original company, with 73.1 MW and 727k square feet raking in $94 - $292 per kilowatt leased over the course of the year.
Leasing rates vary significantly depending on the exact services in question. Common lease types for major businesses include:
- Colocation. Companies can store private servers in third-party data centers and pay an increased cost to maintain the physical space in which said servers are housed.
- Hyperscale. Ideal for big-data processing and cloud-based programs, this storage type is made to be horizontally scalable at massive levels.
- Interconnection. This allows organizations to share similar data between multiple data centers as a data-protection failsafe in case of infrastructural failure at either location.
As other businesses become digital, more cloud storage physical space is needed
Despite extraordinary lifetime growth, lease rates actually decreased quarter to quarter over the course of 2021. But far from indicating a depopularization in the present data storage strategy, data center lease rates stabilized in the last quarter in 2021 following an alignment between available space, and infrastructural demand.
Businesses continue to migrate their operations to the cloud, and as this happens more physical space is required to host the ubiquitous solution. The deceptively-named digital service is still entirely dependent on brick-and-mortar data centers in order to maintain optimum functionality.
Following a period of stability, lease prices are likely to climb until new infrastructure is created along with a surplus of space, when they will drop. As demand/availability aligns once again, data center lease costs will stabilize once again.
Prices of digital storage real estate
Average data center lease rates vary by location, and annual costs depend on the size and scale of the organization in question. Other factors include whether servers are being engaged for active computation or passive data storage, and whether the organization is colocating.
Smaller businesses working with accessible data center companies may be able to colocate one storage-only server at a rate of $29 per month in Ontario, Canada. Of course, increased usage may accrue additional per MW costs.
The total cost to your company will largely depend on the scale of operation. Organizations with need for greater storage and computational capacity will require a greater number of servers, and costs per square foot will go up depending on the number of cabinets you occupy and the bandwidth you use.
Some Fortune 50 organizations use up to 80 MW. Assuming these companies are paying the mid-2021 average of $292 per KW, this represents a total cost of around $23million. The yearly average for small businesses is significantly lower at around $10,000 per year.
What does spend on digital storage real estate teach you about a company?
If you are on the outside of a company looking in at their annual expenditure on digital real estate, there’s a lot you can hope to learn. In addition to technographic and firmographic information, how an organization handles data can give your team critical supplemental insight into a business’ relationship to technology, operational scale, annual expenditure, and year-over-year growth trends.
Another important factor to understand in this case is the solution a company may be employing to facilitate their data storage and computation. Services like AWS and Cloudflare are much more accessible to smaller companies than private data centers, and which is being engaged should be noted.
Intricately can help you capture this data on companies for your sales funnel
There is a wealth of information just beyond the click of the button that will allow your sales and marketing teams to design personalized campaigns for your target leads – and Intricately can help you find it.
From the number of employees under an organization’s roof to the number of colocated servers in their nearest data center, every tidbit is useful and can provide you with the key to a long-lasting and mutually beneficial relationship between your business and theirs. Intricately’s unparalleled data insights will let you read these details easily and empower your teams to boost your average conversion rates, along with your bottom line.
Sign up for a demo today to see what else Intricately can offer you.
