For today’s healthcare providers, the maintenance and storage of ever-increasing volumes of electronic medical records (EMR) has become a major challenge.

Data that once required just a tiny allocation of the programmed space in the hospital or medical office building now demands thousands of square feet of purpose-built mission critical facility. Hospital operators now face many important decisions to determine how to best house the Information Technology (IT) equipment required to support their EMR systems.

Unlike the hospital facilities built by regional healthcare providers, mission critical facilities can be placed almost anywhere. In deciding whether the mission critical facility will be located at the hospital/medical office building or in a remote location, healthcare providers must weigh a variety of factors.

Following are just a few of their considerations in selecting a data center location:

Capital expenditure: A one-time capital expenditure for the greenfield data center construction itself (excluding computer equipment and real estate costs) will typically run from $12,000 to $20,000 per critical kilowatt (kW) of infrastructure installed. A 2000 kW facility will typically range from $800 to $1,300 per square foot to build.

Utility power cost: Today’s data center operator is painfully aware of the rising cost of utility power. When operating a facility that consumes 2000 kilowatts, utility charges of $.10 / kWhr will cost more than $1.75 million annually.

Power costs have driven big data operators to some of the most remote locations in the country, including Eastern Washington, Utah, and Oregon. 

It’s not enough, however, to have low power costs if your site is too far from the power provider’s transmission system. Substations and transmission fees can also run in the millions of dollars.

Cooling of the IT equipment adds significantly to the power burden placed on the data center as well. Because of this, big data operators often seek locations that have favorable climates where they can utilize cool, dry, outside air. 

Geographic conditions on site: Nearly every region of the country has its own brand of natural disasters that can knock out a data center facility instantly. Owners must weigh the natural disaster risks of a given region.

Fiber availability: Another key consideration is the location of the nearest fiber bank and whether the fiber will meet the health care owner’s bandwidth and latency requirements.

Fiber providers have "backbone" runs from each major metro area but not as much in some of the remote parts of country. It is important to meet with the provider and confirm that their infrastructure is in place as advertised.

Sales and property tax consideration: Sales and property tax structures in each state are an often over-looked aspect of data center cost and can account for as much as a third of the data center operating cost.

In a typical example, if an owner spends $45 million per critical megawatt for IT equipment in a state with 8.25% and 1.35% for sales and business property taxes, respectively, the annual taxes will be roughly $1.2 million.

Consider that the average IT refresh is every four years, and it is apparent why state tax structures become such an important factor.

In brief, the data center site selection process has become increasingly complex and has serious business ramifications. The savvy healthcare owner will determine how important each criterion is to them and then weigh these factors carefully before making the important decision on where they will locate their data center facility for maximum benefit.

Mark Thompson leads the National Advanced Technology/Mission Critical Group for DPR Construction, one of the country’s top technical builders and the third largest data center (ENR 2011) and 2nd largest telecommunications contractor in the nation (ENR 2012). With more than 20 years of experience in the delivery of mission critical, semiconductor, life science and corporate office projects, Thompson works with DPR offices across the country to enhance overall project delivery and quality of service for the company’s Advanced Technology customers, which include such industry leaders as Digital Realty Trust, Facebook, AT&T, Microsoft, HP, Fortune Data Centers and Yahoo!. He also serves as Project Executive on several of DPR’s current mission critical facility projects and his extensive technical expertise includes project evaluation, scheduling, project logistics, cost control, subcontractor management and strategic planning. For more information about DPR Construction, please visit