The Evolution of Data Center Economics

21st March 2025

Share this post

Why Preconstruction Strategy Matters More Than Ever

By Sophie Smith, Director

In the rapidly evolving world of data centers, the difference between a successful project and a costly headache often boils down to what happens before the first server is ever installed. As we stand at the intersection of skyrocketing demand and constrained supply chains, preconstruction strategy has emerged as the unsung hero of data center development.

Beyond the Blueprint: Reimagining Preconstruction for the Digital Age

Remember when estimating a data center build was primarily focused on basic square footage calculations, with power requirements as a separate consideration? While power remains a critical and increasingly complex challenge in today’s market, the overall preconstruction landscape has expanded dramatically.

At Soben, we’ve observed a shift in how industry leaders approach these early-stage decisions. The traditional “build it and they will come” model is giving way to more adaptive approaches that prioritize optionality and responsiveness to market conditions.

The Hidden Costs of Early Data Center Strategy

One of the most overlooked aspects of data center economics is how preconstruction decisions ripple throughout a facility’s entire lifecycle. A seemingly modest $1 million saved during design can easily translate to $5 million in operational efficiency over five years – or conversely, create maintenance nightmares that drain resources indefinitely.

This multiplier effect works in both directions. Cutting corners on early modeling and simulation work might save upfront costs but can lead to issues that compromise equipment lifespans and energy efficiency. 

Data-Driven Estimating: The New Competitive Advantage

The most sophisticated players in the data center space are leveraging predictive analytics and historical project data to create estimating models that continuously improve. At Soben, we’ve built proprietary databases that track cost trends across regions, equipment types, and project specifications – allowing us to spot anomalies and opportunities that would be invisible with traditional estimating approaches.

This isn’t just number-crunching – it’s competitive intelligence. When you can confidently predict how different design decisions will impact your total cost of ownership three, five, or ten years down the road, you gain negotiating leverage with vendors and clarity on where to allocate capital for maximum return.

The Sustainability Equation

ESG considerations are no longer nice-to-have add-ons but core drivers of data center economics. Preconstruction is where the most impactful sustainability decisions are made – from power sourcing strategies to equipment selection and circular economy considerations.

The ability to model different scenarios and their carbon impacts alongside traditional cost metrics is becoming the new tradition. We’re increasingly seeing clients who understand that futureproofing against evolving regulations and market expectations around sustainability is as important as protection against obsolete technology.

What’s Next: Preconstruction Innovation on the Horizon

As we look ahead, several trends are reshaping preconstruction excellence:

  • Modular design approaches that balance standardization with customization
  • AI-powered estimation tools that continuously refine accuracy based on actual project outcomes
  • Greater transparency in supplier networks to enhance resilience against disruption

These innovations are converging to create a more dynamic, responsive approach to data center development – one where the boundaries between design, construction, and operations become increasingly blurred.

Join the Conversation

The questions facing our industry are complex: How do we balance long-term infrastructure investments with the need for flexibility? What’s the right mix of fixed and variable costs in an uncertain market?

Maybe you’re planning your next hyperscale facility or optimizing your enterprise data centers, the decisions you make during your preconstruction strategy will define your competitive position for years to come. In a world where infrastructure is increasingly indistinguishable from business strategy, getting these early choices right isn’t just an engineering concern, it’s a business imperative.

We explore these themes and more in our latest Data Centre Trends Report for 2025.
________________

Sophie Smith is a Director at Soben, where she leads a team of specialists focused on delivering cost certainty and strategic value for data center clients. She’ll be speaking at DCD Connect New York on March 24th as part of the panel “DCD>Debate: Is ‘Pay-As-You-Go’ the future of data center supply chains and vendor relationships?”

Categories: ,