A rule of thumb is $4000 or $4500 per kilowatt.

So 100KW of power, with N+1 power feeds, generators, full UPS backup system, etc. would cost about $500K to build. Would give you 10 to 20 racks' worth of power.

However, that is too small to be worth it, so they would probably build something quite a bit larger than that.

Figure 200 racks, each with 8KW-10KW per rack, that means 2 megawatts of power, thus 2000 * 4500 = $9 million for the building.

Figure $40K per rack to fill it with hardware (at a low estimate), half full of 100 racks is another $4 million.

Plus they have to manage construction, sign various contracts, pay permit fees, buy land, pay for fiber, etc. At a minimum they would need $20 million all in before serving the first byte of traffic.

All this is my estimate, could be entirely wrong.

Depends on the data center of course.

There are four components to a 'data center':

1) The structure. These can be pretty simple, a concrete slab, then 'tilt up' walls tied together by steel joists. Internal structure is 'UPS area' / 'power ingress/conditioning' / 'data area' / 'office area' / 'fire systems area'. If its mostly data operations the bulk will be the 'data area'. The cost of land figures into it as well but you probably try to build it where land is cheap, connectivity is high, and power is cheap.

2) Power and Cooling infrastructure. This stuff is dictated by both the climate around the data center and the municipality. Santa Clara California used to have a bunch of semiconductor fabrication plants (fabs) which have all since closed. That left them with excess power capacity, so lots of folks are building data centers there to get access to the cheaper power. (land is still expensive). Cooling can be one of a number of forms, evaporative works well in the Bay Area generally.

3) Staff - Generally an electrician, a network guy, a security lead (+ some number of contract security personnel)

4) General 'stuff' associated with building a data center (raised floor tiles, sprinkler systems, power conditioners, big switches, UPSes and their batteries, chillers, more big power switches and transformers, generators (back up power), lights, etc.

I would be surprised if it cost less than $5M to build or more than $15M.

I actually put together a plan for a 'pocket' data center (one that could be put into an urban area easily, 1 - 3MW of power) but not surprisingly cannot find a bank to fund it. (its around $10M all up depending on initial land and fiber costs).

I was talking to a guy who owns a warehouse in Brooklyn a few weeks back. He said he was turning a relatively small part of it (a few thousand square feet, if I recall) into a residence, and leasing the rest. He started complaining about his prospective tenants, so I, sort of jokingly, suggested he build a small data center, since the lease revenue would be much better, even if the costs rise as well. Too bad you weren't there to close the deal!

Heh, timing is everything I guess.

So one 'take' on the cloud meme is public utility compute. I have never been a big fan, but have found the success of EC2 and its equivalents to be reason to doubt my doubt :-)

Back in the way back times the high school I went to shared a mainframe (a Univac) with all the other schools. They used it teach programming and to run various bits of accounting and grading and such. That installation could be an EC2 cluster now. (it isn't but the same reasoning for a shared mainframe would apply to sharing the districts computing tasks into a web2 style cluster.) Every time all the machines get stolen out of a school I think "Gee if they were just terminals and useless without the cluster, they would not be as tasty a target."

Still, not a fan, but like I said the ability to drop in a data center near the center of things in an friendly way, seems like a Useful Thing.

I think the target market in Brooklyn is leasing backup/DR cages for big banks.

I have absolutely no idea what Groupon's load actually looks like, but as for actual datacenter cost, $1,000/sqft would be a starting minimum, and that's for a decent sized datacenter where some economies of scale kick in. Google supposedly spends as much as $3000.

One of the smaller datacenters I've ever been in was around 20-30,000 square feet. Replicating it probably would have cost closer to $3000/sqft than $1000, so you're probably talking about $40 million minimum.

The article says they raised 700M. Even if costs them 100M to build a data center, they can't use 1/7th of the money they raised, to build one? How exactly are they spending that much money?

A reasonable question to which I have no clear answer, but this is the company that tried to turn a $420 million operating loss for 2010 into a $60 million operating income by amortizing their marketing and acquisition costs. Perhaps they're still bleeding money on such costs?