The Credit Crunch! – The flip side of the coin for Data Centres

Having looked at the positives of a credit crunch for data centres, it’s equally important to consider what other implications there are for the industry. 

As has been widely reported, utility prices – particularly electricity – are going up. An average 3 bedroomed house is said to use around 4,000 kW hours of electricity per year.  

Put in monetary terms, at 9 pence per kilowatt hour, this would cost £360 per year to run.  

Data Centres use huge amounts of power, just one rack of equipment (with power and cooling) will average around 42,000 kW hours of electricity in a year.  

That’s £3,780 – an average sized commercial data centre might have 500 racks, so that’s an electricity bill of £1,890,000 at 9 pence per kilowatt hour.  

Electricity prices are predicted to rise by anywhere between 25 and 40 percent by the end of this year. This could mean a price increase in power costs for a data centre of 500 racks of £750,000!  

So, why is this bad news? Many data centres fixed the prices with the customers that they host many years ago ... and they included electricity!  

In other words, some data centres will have to absorb these massive increases. They probably won’t survive. Those that do have pricing that allows them to pass on their electricity costs are still going to suffer.