Colocation Power Calculation Guide: How Much Power Do I Need?

If your cloud workloads are substantial enough to set up a colocation space, you’ll need a grasp of power requirements before haggling with colo providers.

data center colocation power
Matt Pinto

Jan 12, 2023


If your cloud workloads are substantial or unique enough to set up a colocation / private cloud facility, you’ll need a good grasp of your power requirements before you start haggling with data center providers. We’re going to take a run at some colocation pricing basics to help you understand your most important considerations.


What Is Colocation?

Colocation (often shortened to colo) is a rental service for space and power that data center vendors provide. For a fee, you can house and run IT equipment (like servers) on their premises, utilizing the colocation vendor’s space, power, cooling, and sometimes services. 

Colocation allows you to build out customized physical cloud infrastructure – without the expense, space, and resources required to properly house and maintain a larger set of servers. Colocation providers will ensure facilities are that your space is set up for whatever infrastructure deployment you’d like, that the space is cooled for optimal performance, that adequate power is in place to support your hardware, and that there are many ISPs “on-net” for easy access to internet backhaul or your physical WAN.

Colocation can offer additional benefits for security and compliance standards, which could be harder and more expensive to maintain at your own site.

Setting up a colocation space is more complex, and at sub-scale more costly, than utilizing public cloud infrastructure, but certain workloads can only run in a colocation facility, while certain workloads can run at substantially lower cost in a private cloud.

For more basic detail on what colocation services entail, check out our colocation data center guide. Also, our guide on different types of data centers is another useful resource.


How Is Colocation Power Pricing Decided?

Colocation is typically priced as a function of space and power utilized. The power component of your colocation bill basically comes down to how much power your equipment needs to run, measured in kilowatts (kW) – and how long you need to run it, which the data center breaks down as kilowatt hours (kWh). 

Data-center power is a hot topic – taken collectively, data centers account for around 2% of the US’s total electricity demand. Data centers calculate their own power usage (and how much to charge you) based on three factors.

  • Heating, ventilation, and air conditioning (HVAC) – keeping servers at the correct temperature and humidity is essential for good performance.

  • Equipment loads – as we’ll see shortly, data centers need to know exactly what your servers are drawing down to provide accurate colocation pricing.

  • Miscellaneous operational loads – like any commercial building, a data center needs power for utilities such as lighting, staff communication systems, security systems, and so on. All these must be factored into colocation costs, too.

To figure out how much to charge, data centers must work out the cost by area – how much wattage and amperage can they supply in the space they have? Then they develop colocation pricing based on how much room (or how many cabinets) you want to take from their colocation stock. 

To use a broad example, let’s say your data center has worked out that they can provide a critical infrastructure that can safely and comfortably support 120W of powered equipment usage per square foot. They’ll then provide a cabinet that allows each customer around 4kW.

With this capacity in mind, the data center asks the customer for a detailed breakdown of their equipment requirements, before providing a price. And we mean detailed. The list could include the following. 

  • Number of cabinets required

  • Type of power required (including amperage and voltage) for each piece of equipment

  • Number of power feeds of each type, including any redundancy/backup power (A+B power) required

  • Connectivity requirements – Internet? Voice? Your colo bandwidth needs will affect costs.

  • The kind of cross connects needed to support the connection – CAT6? Single Mode Fiber? Multimode Fiber?

It might seem overly fussy. But for the data center, successful operations require them to be specific. They must be cautious about what is installed and used and manage the impact on their power consumption and HVAC accordingly. 

Things can quickly get out of hand if customers install equipment that pulls down 8kW in a 4kW cabinet. Or equally problematic, if only 2kW is being used, but the data center is using up precious HVAC power to maintain efficiencies intended for 4kW of consumption.

Without efficient management, the calculations required to run the building properly can quickly go astray. That’s why the data centers (quite rightly) demand as much information as possible and aim to provide colocation pricing based as closely as they can on your actual usage. 

How do I work out how much power my equipment needs? That depends on how easy your equipment manufacturer has decided to make it. The numbers you need are often found in the machine’s accompanying paperwork. Alternatively, some manufacturers prefer to handle queries like this via their customer support team, and they’ll provide you with a toll-free (hopefully) number you can call.

If your equipment is old, or pre-loved, this research becomes tricky – but don’t give up! It’s an essential part of obtaining a viable data-center colo quote.


What Happens If My Equipment Power Needs Don’t Match the Available Cabinets?

In an ideal world, your equipment would pull down 4kW, exactly matching the available cabinet the data center offers. In this case, colocation pricing couldn’t be simpler. 

However, there are two scenarios any colo prospector should bear in mind, before entering any negotiations.

Colocation Pricing Scenario 1 

You’ve got enough gear for two cabinets, but it’s all low power consumption – you only need 2kW.

It’s likely the data center will adjust your quote, and the colocation pricing will reflect that you’re only using a half cabinet’s worth of juice. 

However, your colo costs will likely consider the fact you’re using space they could be charging more for – so you can expect a higher price per cabinet.

Colocation Pricing Scenario 2

You’ve only got one cabinet’s worth of physical gear – but it’s high-power gear. You need 8kW to run it. 

There’s still some room for negotiation, but the data center will probably want you to spread the equipment across two cabinets, so they can balance the load in relation to their infrastructure.

Colocation negotiations can be difficult. It pays to work with someone like Lightyear. We deal with colo providers day in, day out, and we can help you navigate these complicated, frustrating quote processes to maximize your network spend as you scale. Reach out today, and see how our software platform and our team of network professionals can make this easier for you.

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