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Outcomes
Your guide to optimizing data
center total cost of ownership (TCO)

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Contents
What is total cost of ownership? 4

• Why TCO matters 5

• Your TCO Roadmap 6

Components of your TCO strategy 7

• Technology for TCO 8

• Asset acquisition 9

• Reining in construction costs 10

• The next-gen maintenance edge 12

• TCO in action: people and process 14

• Changing mindsets to prioritize TCO 15

intro
to TCO
TOC1

What is TCO?
A holistic, lifecycle framework for
data center uptime and efficiency

Lifecycle TCO =

Asset Acquisition/Build-out
+
Operations and Maintenance
Optimizing data
+ center TCO ultimately
Capital Renewal
+
improves profitability
End-of-Life Decommissioning and increases uptime.

In today’s connected world, a data center is the holistic view of both initial investment and long-term
definition of mission-critical. When you’re building, operating and capital expenses for your data center.
buying or operating a data center, a misstep today
can mean millions of dollars in expenses that couldTCO means looking beyond the initial cost of
have been avoided. purchasing a piece of equipment—or an entire
facility—to instead consider the cumulative indirect
That’s why understanding and managing your total expenses associated with that asset’s lifecycle
cost of ownership (TCO) matters. The TCO approach from conception, construction, installation,
helps you avoid fragmented, reactionary decision- commissioning, operations and beyond. 
making that can lead to overall higher costs—and a
loss of uptime.  TCO transforms decision-making, requiring
leadership to make maintenance, workforce and
From initial acquisition and development through facilities investment decisions based on long-term
operations and end-of-life decommissioning, the return on investment (ROI) and risk management,
TCO framework represents a comprehensive and rather than on immediate results. 

4
TOC2

Why TCO
matters
A TCO management approach powers performance
by integrating every aspect of your data center’s
lifecycle, from conception, construction and
installation to commissioning, operations and
beyond. You don’t need to look far to understand
why this approach can boost competitiveness in
the mission-critical data center industry.

$ 336,000 90% 30%

/hour Potential energy savings
Potential energy savings
with data center
Average cost of from right-sized
infrastructure
downtime1 redundancy2
management3

50% 66%/7%
Data centers systems 5+
Of data centers had a years old use 66% of
serious outage in the past energy but contribute
three years4 only 7% of computing
capacity.5

1
Gartner | 2
Uptime Institute | 3
U.S. Department of Energy | 4
Uptime Institute | 5
Verit

5
TOC3

Your TCO roadmap

1 Assess your current state

• Facilities and equipment condition • Standard operating procedures and processes
• Staffing, roles and skills ‒ Playbook
• Data and technology • Operational budgeting and capital planning

2 Identify gaps

3 Fill the gaps

• Talent • Data and technology
‒ Training and development ‒ Acquire or access through third-party service provider
‒ Organizational and culture alignment ‒ Data capture and governance
• Budgeting and planning ‒ Training

4 Prosper
• People, tools and processes are in place for a TCO model that boosts ROI and uptime

6
TOC4

components
of your TCO strategy
TOC5

Technology for TCO

Data and analytics are the foundation of TCO 

Data and technology are essential for creating an FM automation helps TCO, too. Automating routine
accurate, holistic view of your data center TCO— tasks increases staff productivity and reduces the
and uncovering insights to reduce it. But to harness risk of human errors—the top cause of costly data
trusted data, you’ll need reliable sources, standards center downtime. 
and governance. 
The goal is transparency, ensuring that the right
Today’s sophisticated facility technologies provide data is available in the right context to inform
data-driven insights to streamline TCO management. decisions that will affect TCO and performance.
Advances such as predictive modeling and analytics
and AI-driven machine learning can reveal deep,
dynamic insights about the performance of your
data center facility. 

The following are key technologies and solutions that power effective TCO:

Location Strategy Today’s market intelligence data and analytics platforms integrate data about
labor trends, real estate, tax incentives, energy dynamics, environmental
risks and more to inform location strategy.

Leading data center operations platform for capturing asset data and
managing rounds, assessments, critical incidents and more to inform
budgeting and capital planning.

Mobile facility management platform and business intelligence tool with

cost data for 2 million+ assets. Fully integrated with MCIM.

PM+ PM+ applies risk-based models to deliver simplicity, cost efficiency

Precision and speed. It is a standardized, streamlined, scalable and configurable
Maintenance + reliability-centered and risk-based maintenance program designed for
integration with SMART building technology.

Energy Sophisticated energy management tools provide real-time data for

Management optimizing energy efficiency.

8
TOC6

Asset acquisition
Thinking beyond purchase price

A data center’s location has a major impact on for construction, as well as ongoing operational
TCO—beyond the actual acquisition costs. costs. You should also evaluate relative access to
Overlooking a single factor when choosing a site, power and whether any tax incentives are available.
such as a planned utility rate increase, can affect the
long-term profitability and efficiency of your facility.
Choosing a location for a data center is a complex
Viewing location strategy through the lens of TCO process. How can you balance cost vs. latency, labor
will help you avoid making the wrong trade-offs.  availability vs. natural hazards, or energy costs vs. tax
incentives? And, how do you predict future demand
For example, state and local policies around unions, and the potential for scaling up your facility?
sales tax and land costs can all be game-changers

Five key steps to viewing asset acquisitions though the TCO framework:

1. Outsmart your peers with Market intelligence can reveal if your clients and competitors are located
data and analytics. in a particular market. Data analyses can visualize multiple location
criteria, including location incentives and labor force demographics. 

2. Explore creative financing Creative financing options and smart negotiations for economic
options. incentives can reduce short- and long-term costs for acquiring and
building a data center facility.

3. Energy costs: more than the Since power is one of the highest ongoing operating costs for a data
sum of their parts. center facility, it’s important to uncover all the details. Look closely at
the local utility’s pricing structure and local market dynamics.

4. Clean energy options matter. Reliable, competitive renewable energy options make a difference in
TCO by reducing grid dependency and risk—and are important to
stakeholders, too.

5. Consider operational risks. External threats can be obvious—think earthquakes and hurricanes.
But don’t overlook the less apparent risks, such as a zoning
restriction that could limit expansion, or the lack of a guaranteed
municipal water supply needed for cooling.

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TOC7

Reining in
construction costs
Construction costs have been on the rise for much of the past
decade, especially in some of hottest data center markets. An N+1
data center with 3.5 MW capacity costs $280 to $350 per square foot
to build, or more—depending on power, redundancy and availability. 

Managing data center facility construction and build-out costs is a

key component to reducing TCO. 

Five steps to rein in construction costs:

Leverage buying power. Buy in bulk. Partnering with a trusted third-party vendor with strong
supplier relationships can help you benefit from volume discounts
and preferred pricing.

Pre-order—like yesterday.
Get creative on design.
Pre-order as much and as early as possible. While ordering earlier won’t
necessarily result in direct cost savings, it will help keep construction
on schedule—thus reducing overall project costs. With a long lead
time, you’ll be ready to install critical components when needed.
Building two stories instead of one can save money where land prices
are high. You also may also find savings by simplifying and
streamlining electrical design.

Pave the way for operational Whether you’re building new or updating a facility, include facility
savings. managers in the project to ensure that the building infrastructure can
be managed efficiently while driving 100% reliability.

Ensure a smooth launch with Operations don’t begin until your building equipment is ready for
expert commissioning. action—and operational delays undermine TCO. Your commissioning
team should deploy data and analytics to test, monitor and verify
functionality and reliability for Day One operations.

10
Streamlining
facilities
management
Once a data center facility is commissioned and
operational, employing leading facility management
(FM) practices can reduce TCO and ensure uptime,
too. For colocation providers, strategic FM can also
be a differentiator, creating a competitive edge in a
crowded market by extending value for end users.
These practices also improve energy efficiency,
supporting ESG and carbon emission reduction targets.
Four FM strategies to reduce TCO:
1. Embrace next-generation preventive
maintenance. Reliability-centered maintenance
focuses on equipment condition rather than
a preset maintenance calendar. Focusing
on reliability helps avoid breakdowns and
downtime, while extending equipment life.  safeguard against changes in environment,
2. Power workflow productivity with technology.
Even a minor mistake can lead to a major
data center problem. Most errors are human-
made, but technology can help reduce the
risk. Advanced FM software minimizes the
opportunities for costly human errors by
automating data center operations and
centralizing and standardizing information.
11
“Doing maintenance
on a data center is
like replacing parts on
an Indy 500 car while
it’s on the track.”
3. Align people, processes and equipment around
standards compliance. Effective FM teams
ensure that all standards—from operations
and maintenance to staffing and training—are
being met. Strong operational standards help
maintenance or other risks that could cause
outages. Operating within compliance
standards reduces risks, which ultimately
translates into cost savings.
4. Align FM performance outcomes with
organizational strategy. Forward-looking
data center leaders are deriving more
value from their facilities teams by moving
toward strategic partnerships with FM.
TOC8

The Precision Maintenance +

Edge
Facility management processes have a significant impact on TCO,
which is where reliability-centered maintenance and best practices
make a difference. 

Traditional FM programs focus on maintenance schedules dictated by

equipment manufacturers or corporate standards. However, the
conventional, calendar-based approach adds to capital expenses
when technicians are required to replace equipment regardless of its
condition, or when emergency repairs are needed because equipment
parts deteriorate ahead of the preset maintenance schedule.

In contrast, precision maintenance (PM+) is driven by criticality and

condition. Rather than maintenance-by-schedule, preventive
maintenance leverages sophisticated Internet of Things (IoT)
diagnostic tools to gather and analyze real-time data that tracks
equipment vibration, heat generation and other indicators of
equipment condition. Human expertise is augmented by data
analytics and algorithms that detect performance anomalies not
visible by human perception alone.

Some data center operators view tech-driven management strategies

as unproven because they have had trusted maintenance schedules
set by equipment manufacturers for many years. However,
sophisticated FM techniques actually reduce the risk of equipment
malfunctions and downtime. Data-driven early indicators enable
engineers to identify and remediate issues to prevent outages and
equipment failures. In turn, extended equipment life supports more
accurate capital planning than calendar-centric maintenance.

By managing equipment with the right maintenance strategies, at the

right time, you can reduce capital and operating expenses, and—
most importantly—improve uptime.

12
Capital planning:
Averting unplanned expenses
The TCO framework can help extend equipment life and reduce capital expenses for
replacement or refurbishment of infrastructure elements, machinery and equipment. First,
you’ll need to apply the TCO mindset to your capital planning and investment. Through a
holistic, end-to-end asset management program, you can ensure that your data center is
resilient, avoid unplanned capital expenses and establish a more accurate TCO.

Four phases of capital renewal planning to reduce TCO:

Create an asset registry. Do you know what your critical assets are? A first step toward capital
renewal is to understand what you have, from building to the systems
that power them. 

Assess condition/capture data. To prioritize investments, you’ll need to assess the condition of each asset
and capture accurate data about age, performance and other issues.

Prioritize investments. With robust data pertaining to your assets, you can determine replace-
or-repair priorities on the basis of age, condition and/or criticality.

Create a capital plan. With financial analyses driven by data and analytics, you can create
an objective capital plan that optimizes facility performance, extends
equipment lifespans and improves your data center TCO.

13
TOC9

TCO in action:
people and process
A successful TCO program is based on having the right people and processes in place. One important
element is a playbook of standard operating procedures and best practices that transcend budget
limitation, industry variations and geography. Another key component is access to highly trained staff
with the  experience and expertise to successfully transition a TCO strategy from data collection and
analysis to a daily mindset of big-picture thinking. 

With the right TCO framework, standards and training, your data center’s operations can be adapted to
routinely capture data at the point of creation, and then apply it throughout the lifecycle of the asset.
When everyone understand the model and the requirements for capturing the right data and taking
strategic action, your TCO framework will be positioned for success.

Critical environment Rigorous training

management playbook and change management

Ideally, your playbook provides overarching
governance of your data center management
and encompasses risk management,
operational delivery, training, role
assignments and chain of command.
It’s especially important to have an authoritative
source of procedures in the data center
environment. While most daily activities
involve low risk, some can be hazardous.
Working with high-voltage equipment,
confined spaces or high-pressure mechanical
systems, for example, poses safety risks. 
A robust playbook is effective only to the extent
that your personnel are skilled at following it.
That’s why a well-rounded training program
is essential for successful TCO results.
TCO requires teams to consider the
interrelationship of different actions: what are
the risks and potential long-term impacts of a
decision? And, it requires an understanding of
individual best practices and SOPs that document
actions, capture data, protect health and safety—
and ultimately improve uptime and TCO. 

While safety should always be a priority, a lack

of formal procedures or a failure to follow best
practices can threaten your data center with a
costly outage. Reliability-focused maintenance,
for example, has become a best practice
because it helps prevent equipment failures
and unplanned downtime—reducing TCO.

14
TOC10

Changing mindsets
to prioritize TCO
Adopting a TCO framework requires new thinking Training intensity should be calibrated to the
about operations management and maintenance. Your technical challenges of different job roles. For a
team may be unfamiliar with the leading practices and technically demanding role, as much as 60 hours
tools required for operating with the TCO mindset. of technical training is recommended, whereas a
minimally technical role—or refresher training—
Proper training—updated annually—will help might require only 40 hours.
prevent catastrophic errors that can lead to millions
in lost revenue. Understanding how to implement a While equipment vendors may provide training
UPS bypass, for example, is essential for ensuring on their products, none will provide the holistic
continuous power if the UPS is malfunctioning. approach required for reliability and TCO management.
Training tools include hearing from vendors and
senior engineers, or testing and solving real-world
problems. With a virtual reality headset, for example,
a technician can practice a procedure with guidance
from a seasoned expert. 

When your team is up to date on the latest best

practices and tools, your TCO model benefits.

Four pillars of a TCO training program:

Assessments Training

• Data center skills assessment for all technicians • Curriculum specific to data center disciplines
• Gap assessments to build customized • Require participants to achieve 80% test results
curriculums based on site requirements prior to competency assessment

Drills Scenarios

• Practice response actions for typical engineering • Theory instruction

equipment failures • Practical skill development
• Promote site-level discussions • Site systems knowledge
• Review the actions found in the site level
emergency operating procedures

15
Powering
outcomes for
the future,
today.
Jim Nolden
Data Center Solutions
Americas
+1 214 438 6243
James.Nolden@am.jll.com

Simon Browne
Data Center Solutions
EMEA
+1 214 438 6243
Simon.Browne@eu.jll.com

Ralph Davison
Data Center Solutions
Asia Pacific
+1 214 438 6243
Ralph.Davidson@ap.jll.com