Colo Rental Rates are Rising: Are You Keeping Track of Your Power Utilization?

It’s getting more expensive to rent space in colocation data centers.

According to CBRE, colocation rates are up 18.6% year-over-year to a record $163.44 per kW/month due to limited supply and strong demand.

Average Asking Rental Rate with Y-o-Y % Change for Primary Markets

*Rental rates are quoted asking rates for 250-500 kW at N+1/Tier III requirements. Image Source: CBRE Research, CBRE Data Center Solutions, H2 2023.

As colocation costs increase, data center professionals must understand their power pricing model, have clear goals for how they will contain costs, and implement power metering and monitoring technologies to meet their objectives.

Understanding Colocation Power Pricing Models

Colocation data center providers typically offer various pricing models to accommodate the different needs and usage patterns of their customers.

Common power pricing models include:

• Per rated circuit. Customers are charged based on the number of power circuits they require. Each circuit has a predetermined rating (i.e., 20A, 30A, 50A), and the price is determined based on the rating and quantify of circuits leased.
• Metered power pricing. Customers are charged based on their actual power usage, measured using dedicated meters installed at their racks or cages. The pricing may be tiered, with different rates for different levels of power consumption.
• Peak load pricing. Colocation providers may implement a surcharge for clients whose power usage exceeds predefined thresholds during peak demand periods. This encourages customers to manage their power consumption efficiently and helps colocation facilities maintain stable operations during peak times.
• Fixed power allocation with overages. Customers are allocated a fixed amount of power included in their base pricing. If they exceed this allocation, they are charged additional fees for the excess usage. This model allows customers to have predictable costs while still accommodating occasional spikes in power usage.
• Blended pricing. This model combines elements of per rated circuit pricing and metered power pricing. Customers may have a base fee for a certain number of circuits and then pay additional fees based on actual power usage beyond their allocation.
• Green power premium. Some colocation providers offer customers the option to pay a premium for power sourced from renewable energy sources to support their sustainability initiatives.
• Customized pricing. Colocation providers may also offer customized pricing models tailored to the specific needs of large customers or those with unique requirements. These could include options such as dedicated power infrastructure and special redundancy configurations.

Goals for Managing Power in a Colocation Data Center

Managing power consumption at a colocation data center is critical for cost savings, efficiency, and uptime.

Common goals you should consider include:

• Maximize utilization of existing circuits. Aim to optimize the utilization of existing power circuits without overprovisioning. This involves carefully planning and allocating power resources to ensure that circuits are utilized efficiently without exceed their capacity, which could lead to the risk of tripping circuit breakers and causing downtime.
• Validate power charges. Accurately validate power charges you’re your colocation providers to ensure you are billed for your actual usage. By monitoring power consumption closely, you can compare actual usage with billed amounts and identify any discrepancies or billing errors.
• Preventing surcharges. Many colocation providers implement peak load surcharges to incentivize customers to manage their power consumption during periods of high demand. To avoid these surcharges, monitor and control your power usage, especially during peak times, to stay within your predefined thresholds and minimize additional charges.

How to Manage Power in a Colocation Data Center

To effectively manage power in your colocation data center, you must implement metering and monitoring technologies that provide critical insights.

Power Metering

Common power metering infrastructure include:

• Intelligent rack PDUs. Intelligent rack PDUs provide real-time metering of power consumption at the rack level, or, if the PDUs are outlet-metered, at the device level.
• Smart busway tap boxes. Smart tap boxes installed on busways enabled granular monitoring of power usage at the rack level.
• Branch circuits. Metering individual branch circuits allows you to monitor the power consumption of different areas of the data center.
• Inline taps. Inline taps offer non-intrusive monitoring of power usage without disrupting existing infrastructure. They can be installed at various points in the power circuit to capture real-time power data.

Power Monitoring

Deploy Data Center Infrastructure Management (DCIM) software to collect, store, alert, and report on the live measured readings your power meters generate, facilitating more informed decision-making and proactive management of power capacity and utilization.

Ensure kWh is Available

When monitoring power consumption in a colocation facility, you must pay special attention to the type of data being collected and ensure that kilowatt-hour (kWh) is available.

While real-time power usage metrics offer valuable insights into immediate consumption, kWh data provides a comprehensive view of energy usage over time. This information is invaluable for accurately assessing energy efficiency, identifying trends, and optimizing power consumption strategies for long-term sustainability.

Additionally, kWh data is often required for regulatory compliance and sustainability reporting, making it essential for ensuring transparency and accountability in energy management practices.

Prioritize solutions that offer robust kWh tracking functionality to support comprehensive energy management and facilitate more informed decision-making.

Benefits of Data Center Monitoring for Colocation Tenants

Tracking power utilization helps you:

• Maintain uptime. Set warning and critical thresholds on rack, inlet, and circuit breaker loads and three-phase balance and receive automatic alerts upon threshold violations to be the first to know of potential issues so you can address them before they cause bigger problems.
• Increase power utilization. Built-in power circuit intelligence helps you understand the power load and capacity at every hop, stranded capacity charts show you how much power is available at each rack, and automatic device power budgeting helps you safely deploy more servers in your existing racks, achieving up to 40% more utilization.
• Avoid overage charges. Monitor energy usage to avoid peak demand charges, accurately bill internal groups to drive energy efficient behavior, and validate energy bills against actual consumption to ensure their accuracy.

Bringing It All Together

As colocation rates continue to rise, organizations must closely monitor their power utilization to optimize costs, increase efficiency, and maintain uptime.

Understanding the various power pricing models offered by colocation providers and setting clear goals for managing power consumption are important steps. Implementing effective metering and monitoring technologies can help you achieve better uptime, increase power utilization, and avoid overage charges, ultimately ensuring cost-effective and sustainable operations in the face of escalating costs.

Ready to see how Sunbird’s world-leading DCIM software can help you manage power for your colocation data center? Get your free test drive now!