How we built our mini data center. Finance, pricing

Published on November 03, 2016

How we built our mini data center. Finance, pricing

    Continued Part 1 - Colocation
    Continued Part 2 - Hermozon
    Continued 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, however, we “outline” everything in general terms - we do not see any problems at all. In this article we will try to touch on the topic of service pricing, what it consists of and what affects 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 for 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 did the funds come from? How much did you spend? Have you attracted investments? Is it cost effective? 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 newcomer to the market this is the result. Further, by attracting customers (including corporate ones), we came out with a not bad turnover, from which we bought our own equipment. And now, it has become enough to qualify for your own data center (well, you know about the real reasons without us).

    The financial side of the issue is simple. We spent on the construction of the data center approximately as much as we earned from November to May. This is not a space amount, 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 I saw financial reports. Therefore, we can say that we practically earned all of this ourselves.

    We saved a huge amount of money during the 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 to “salt” unnecessary resources is not advisable for our project. Right now, a new UPS is coming to us, which is more powerful than the old one and will work with it in pairs, although the load has not yet reached the threshold.



    What does the cost of the service consist of? How do we see this?


    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 service of a dedicated server you need to put the following parameters:

    • 1. Equipment and its depreciation. We purchase HP used servers in order to lower 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 a very low power consumption, but more on that later.

    • 2. Power consumption. Here we were more fortunate. A small HP server consumes up to 100 watts. This is 2.4 kW per day. This is 72 kW per month. And in money it’s 144 UAH. ~ or $ 6. For comparison, the old configuration server C2Duo or C2Quad consumes several times more.

    • 3. Air conditioning and free cooling. It is necessary to take into account the costs of air conditioning and freezing in the cold season. Our air conditioner consumes 10 kW on average for air conditioning, it is 240 kW per day, and 7200 kW per month. And this is 14400 UAH. or $ 576 ~. Not a little, right? Freecooling in this regard consumes many times less, about 1-2 kW. If you divide this amount by the entire data center - not critical, but it is not yet full. And that is not all.

    • 4. Room maintenance, security, and other trifles, still eat a decent amount. About 200-300 $ / month.

    • 5. Support - the lion's share of the cost. It is worth considering that our support work is divided into three shifts. 7-15, 15-23, 23-7. Weekends should also be overlapped, and also a senior administrator who should be available 24/7. Total 3 + 1 people per day. Plus 2 to reserve when the first shift has a weekend. Plus the fin department. Total goes to the salary fund at least $ 2000, and in peaks it reaches up to $ 3000.

    • 6. Internet feeds. And there are two plus 1 backup. This is still part of the funds that need to be put into equipment. Namely, 1 megabit on average costs $ 1. 2 channels of 1000 megabits = $ 2,000. Of course, at the expense of wholesale it is a little cheaper, but still. As for the backup - there is payment for traffic, there it is easier.

    Total, the price of one server is formed on the basis of all these parameters. And with honest formation with the park up to 100 servers (we divide the price by 100 servers) - it will come out decent, let's consider:

    • A server worth $ 1000 with a payback of say 24 months. 41 $
    • Air conditioning + power consumption, another 10 $ ~
    • The room is another 3-5 $
    • Support, another $ 20 in price
    • The Internet channel is still about $ 15

    We get the minimum rental amount - 91 $. At the same time, we really rent 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 extra. services, but still, I want the community to know and understand how much the hosting provider has its own infrastructure. In the volume of up to 100 servers - this is more unprofitable, without add. services and other savings that we achieve.

    But at the same time, I do not want to say that we are working in the red, no, on the contrary, we are working with a small profit for the future. It is much more important for us to attract customers with quality than to nibble 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.

    We will try to make the following articles 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 come to us, the Blade HP C7000, which can be talked about a lot, and even more to show. So soon the first video about the work of our data center will be released on our YouTube channel.

    Actually the C7000 blade itself:



    Thank you for your attention.