How we built our mini data center. Finance, pricing

Continuing Part 1 - Colocation
In continuation of Part 2 - Hermoson
Continuing Part 3 - Relocation

Hello! We tried to fulfill the promise and talk about the financial side of the issue. I want to say right away that we cannot disclose commercial information, but “outline” everything in general terms - we don’t see any problems at all. In this article we will try to touch upon the topic of pricing services, what it consists of and what influences it, so that everyone can look at the "kitchen" of the hosting provider. We will tell you how much the servers cost, what are the main problems in their operation and how the price of services is formed, taking into account the necessary profit.



First, let's talk about the data center. There were a lot of questions, for example: Where does the money come from? How much did you spend? Have investments attracted? Is it profitable? We will try to answer these questions. We started our work in November 2015, and for this month we earned only 36 dollars. Not much, but for a newbie on the market this is the result. Further, by attracting customers (including corporate ones), we went out a not bad turn, from which we bought our own equipment. And now, it has become enough to claim its own data center (well, you know about the real reasons even without us).

The financial side of the question is simple. We spent about the construction of the data center about as much as earned from November to May. This is not a space sum, but you can buy a small apartment in the area. We did not attract third-party investments, one of the founders added a small part of funds to help with an unexpected move, after seeing the financial reports. Therefore, we can say that we have practically earned all this ourselves.
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We saved a huge amount of funds during construction, on modularity. Namely, we bought as many resources as we need. Generator - 5 kW, UPS - 5 kW, etc. More - you can always deliver, but "salt" is not the right resources - not appropriate for our project. Now, a new UPS is coming to us, which is more powerful than the old one and will work with it in a “pair”, although the load has not reached the threshold yet.

What is the cost of the service? How do we see it?

In the cost of the service you need to lay a number of parameters that need to be calculated and which are not clear at first glance. For example, in the dedicated server service you need to put the following parameters:

• 1. Equipment and its depreciation. We buy servers of the HP company. In order to reduce the final price for the consumer. In fact, the servers are in excellent condition, with a guarantee from our supplier and with competitive processors. Moreover, HP equipment has very low power consumption, but more on that later.
  
  
• 2. Power consumption. Here we were luckier. A small HP server consumes up to 100 watts. Per day is 2.4 kW. In a month it is 72 kW. And the money is 144 UAH. ~ or $ 6. For comparison, the server of the old C2Duo or C2Quad configuration consumes several times more.
  
  
• 3. Air conditioning and free cooling. It is necessary to take into account the cost of air conditioning and free cooling in the cold season. Our air conditioner consumes an average of 10 kW during air conditioning, 240 kW per day, and 7200 kW per month. And this is 14400 UAH. or $ 576 ~. Not a little, right? Free cooling in this plan consumes many times less, about 1-2 kW. If you divide this amount by the entire data center, it is not critical, but it is not yet full. And that is not all.
  
  
• 4. Room maintenance, security, and other trifles, still eat up a decent amount. About 200-300 $ / month.
  
  
• 5. Support - the lion's share of the costs. It is worth considering that the work of support in our country is divided into three shifts. 7-15, 15-23, 23-7. Weekends should also be closed, and plus another - a senior administrator who should be available 24/7. Total 3 + 1 person per day. Plus 2 in reserve when the first shift weekend. Plus fin department. Total goes to the payroll fund at least $ 2000, and in the peaks comes to $ 3000.
  
  
• 6. Internet channels. And there are two plus 1 backup. This is another part of the funds that need to be put into the equipment. Namely, 1 megabit costs $ 1 on average. 2 channels of 1000 megabits = $ 2,000. Of course at the expense of wholesale it is a bit cheaper, but all the same. As for the backup - there is payment on the traffic, there is easier.

So, the price of one server is formed based on all these parameters. And with fair formation with a fleet of up to 100 servers (we divide the price by 100 servers) - it will be decent, let's assume:

• A server costing $ 1000 with a payback period of 24 months. $ 41
• Air conditioning + power consumption, another $ 10 ~
• The room is another $ 3-5
• Support, another $ 20 in cost
• Internet channel somewhere else $ 15

We get the amount of the minimum rental - $ 91. At the same time, we are really renting such a server for $ 55-70. And all this, provided that we "have" 100 constantly loaded servers.

Of course, these are just dry numbers and these calculations are very abstract, someone pays more, someone pays not only for the server, but also for IP and add. services, but still, I want the community to know and understand how much the costs of the hosting provider with its infrastructure. In the amount of up to 100 servers - it is rather unprofitable, without add. services and other savings that we achieve.

But at the same time, I don’t want to say at all that we work in a minus, no, on the contrary, we work with a small profit and for the future. It is much more important for us to attract customers with quality than to bite our own elbows when we lose them. This is only a small part of what we can tell, but it is no less important in the complex.

The following articles we will try to make more substantive and tied to real events and work in our data center and in the company as a whole. An interesting piece of hardware has already arrived to us, Blade HP C7000, about which you can tell a lot, and even more to show. Soon, the first video about the work of our data center will be released soon on our YouTube channel.

Actually the blade C7000:



Thanks for attention.