Data Center Investors Should Look For Its Efficiency

Nov 29, 2022 | Insight

Data center efficiency is the most crucial factor in investment in this field. Data centers are expensive, and they need to be effective as well. Therefore, data center investors should look for it before investing in any company or project.

The reason behind this is that if the efficiency of a data center is not good, it will not be able to provide its services properly. This possibility leads to a company revenue loss; hence, it becomes necessary for the investor to look for its efficiency before investing in any data center.

Data Center Investors Should Understand These Things

According to the Uptime Institute, the average lifespan of a data center is between seven and ten years before it needs to be replaced due to size or obsolescence. That’s short for an investment with a payback period of five to ten years, so you want to be sure your money is in good hands from day one. From there, it’s all about efficiency, and that’s where data center investors should focus their attention.

The demand for data centers is expected to increase in the coming years as more companies are looking for cloud hosting and colocation facilities. However, there is a considerable difference between what investors believe will be a good location for their data center and what the industry needs. This misperception can lead investors to make big mistakes by choosing a location that may need to be corrected for their business.

Data Center Sustainability

Data centers can be more sustainable by using renewable energy sources, recycling, and reducing the amount of energy used. Using renewable energies will provide power to buildings without burning coal or fossil fuels. Recycling will help cut down on the amount of waste created.

An investor should look for data center redundancy. It means that there are enough redundant components inside and outside the facility in case something fails so that no single point of failure will cause a catastrophic outage.

The most common forms of redundancy come from power supplies, generators, air conditioners, fire suppression systems, uninterruptible power supply (UPS) units, and batteries. These redundancies are vital because they protect critical equipment from failure during an outage or disaster event.

When potential investors are looking to invest in a new data center, there are several factors that they should consider.

By considering the location, market size, local policies, stable politics, and enough energy resources in each potential area they could build the data center, they can reduce the risk of their investment.

An investor needs to know about the efficiency of a data center so that he can invest his money in the right place. Investors can gain this knowledge by reading reviews about different data centers or asking people who have already invested in one such company.

Why is energy efficiency so important?

Energy efficiency is one of the most important things to consider when investing in a data center. The energy cost can be up to 70% of the total operating cost of a data center, and it is always rising. With an inefficient data center, you could lose up to 70% of your potential profit while paying for the initial construction.

Since there are many ways to compare the efficiency of different data centers, investors need to understand the measures and place each into context according to their needs. Energy usage per square foot (or megawatt per megawatt) is an excellent general measurement for comparing similar facilities, but not all data centers have been built to the exact specifications.

A more precise comparison can be made with energy usage effectiveness (EUE), which shows how much power a data center uses compared to how much it processes. EUE doesn’t consider how efficiently the facility was constructed, only how much power its systems use in practice.

To make an apples-to-apples comparison, a third benchmark called average utilization rate (AUR) must also be considered as well as EUE. AUR shows how often servers are being used during peak hours versus other hours.

Efficiency is the key to a payback period.

If a data center is more efficient than its competitors, it can recover the cost of its initial investment sooner and generate a profit sooner. This is why investors should only look at efficiency when analyzing potential investments.

The efficiency of an investment is the key to its payback period, and three things can contribute to efficiency:

  1. The efficiency of the data center space and equipment
  2. The efficiency of the usage of resources in the data center
  3. Other factors, such as heat reduction and cost savings.

Investors should look at more than just the CAPEX cost of a solution; instead, look at the total cost of ownership (TCO). The TCO includes CAPEX and OPEX, both of which have pressure points that can be used to lower operating costs.

Typically, 30% of operational costs are used for cooling, with another 25% for power. It means that over 50% of operating costs are tied to top-of-rack (TOR) efficiency. If a TOR’s power and cooling costs can be lowered by even 5%, the TCO is reduced by 12.5%.

For this reason, data center design should be focused on efficiency. A data center’s economics will depend on many factors: facility size, power density, and power cost are all important to consider.

This is why Greenex Data Center plans and designs data centers with great care and prudence to guarantee a return on data center investment.

How to Assess the Efficient of a Data Center?

When looking for a data center, you want one that is efficient and has good management. To know if it’s efficient, look at its power usage effectiveness (PUE). A PUE of 1.5 is the industry standard, and anything below 1.1 is good. The lower the PUE, the more efficient the data center is, meaning that it uses less energy than others to make the same amount of money.

 There are several metrics associated with data center efficiency, including:

  • Power Usage Effectiveness (PUE)
  • Energy Efficiency Ratio (EER)
  • Coefficient of Performance (COP)
  • Power Distribution Efficiency (PDE)

Another thing to consider is whether the data center has redundant power sources and HVAC systems. If it doesn’t have redundant power sources, there’s no backup plan if something goes wrong.

If it doesn’t have redundant HVAC systems, it means that if there’s a problem with one system, then all of the other systems will go down. It’s also essential to find out how long this data center has been in business. If it has been around for less than ten years, then there’s no guarantee that it will still be around ten years from now.

Data centers are all about efficiency.

The main goal of a data center is usually to maximize energy efficiency—in other words, keeping energy use down and ensuring it stays as low as possible for as long as possible. Data centers are usually located in areas with plenty of cheap energy, such as near hydroelectric plants or inexpensive coal-burning power stations.

Because data centers require a lot of power, they’re designed to cool themselves without relying on outside help, so they often have internal systems for water or air cooling. These cooling systems help reduce the heat generated by the servers inside and keep it manageable so it doesn’t interrupt the system’s functionality.

The world’s data centers are incredibly efficient, especially those that run the cloud. Google, for example, has a reputation for being an extremely energy-efficient company. Even though Google is known for its free services and the fact that you don’t pay to access its products and services, the company can still make money.

This is because they’re able to keep their costs down by using energy-efficient lighting and HVAC systems and by building their data centers close to hydroelectric power plants. To keep cooling costs down, data centers use free cooling, which means they don’t need any mechanical cooling system to maintain temperatures within an acceptable range.


A data center is a facility where the primary business stores, processes, and provides data access. The customers can be individuals, companies, or government organizations. Data centers are necessary for many businesses, from small to enterprise-sized companies.

Investors are always looking for ways to make more money, and data centers are no exception. If you’re considering putting money into a data center, you must know precisely what you’re investing in.

You need to look at how the facility is run, who the managers are, and what kind of services they offer. For example, one of the most important things to consider is how energy efficient the building is. Many older buildings may have a lot of older equipment that is less energy-efficient than newer models, which can cost them a lot more money in the long run.

Before considering any location, you must determine if enough energy is needed to support your operation. Many businesses overlook this critical aspect and choose locations based on other factors, but it’s essential to consider all characteristics of your business.

 If you don’t have enough energy in the area, you are planning to invest, and you will have issues with power outages or even temporary shutdowns during peak load times. This would significantly impact your company’s performance, which could potentially affect your revenue stream.

Read more: Five trends in green data centers technologies to watch by the CEO

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