The cost to build a data centre in the UK is typically between £100,000 and £1 million for small to mid-sized facilities used by NHS Trusts, universities, and SMEs.
Data centre costs depend on size, Tier level, power capacity, and build method. Because of this, the breakdown varies significantly from one project to another. Very small server rooms or edge data centre modules may start from £20,000, while hyperscale cloud facilities can exceed £500 million.
Pricing for small and mid-sized data centres is usually calculated by either floor area or power capacity. Typical construction costs are:
- £10,000–£11,000 per m² or £930–£1,020 per sq ft
- £7,000–£8,000 per kW of IT load
These figures refer to the cost of building the physical infrastructure. This includes power and cooling systems, the server room itself, racks, and supporting systems. It does not include the cost of servers, storage, or other IT equipment. These are usually purchased separately and often represent the largest share of the total investment.
Modular data centres offer a faster and cheaper alternative to traditional builds, cutting CapEx by up to 30% and allowing future expansion.
Ongoing operational costs are equally important. Power is the biggest recurring expense. With electricity at approximately £0.30 per kWh, each 1 kW of continuous load will cost around £2,600 per year in power alone. A 100 kW facility can easily reach £200k+ per year in electricity costs alone.
If you’re planning an on-premises build, understanding the real data centre cost per square metre, per kW and per year is essential for long-term success.
With over 20 years of experience, Secure I.T. Environments Ltd is a trusted partner for data centre projects across the UK and internationally. We support public sector and enterprise clients from the earliest planning stages through to full construction and commissioning.
Fill in the form on our contact page to speak with a specialist about your project.
Key Cost Components of a Data Centre Project
A complete data centre project includes two major categories of cost:
- Infrastructure build – the land, physical facility, power, cooling, racks, room construction, etc.
- IT equipment – servers, storage, networking gear, and software required to run workloads.
Depending on the type and purpose of the project, IT equipment often makes up 40% to 60% of the total budget.
Data centre costs can vary widely depending on your specific needs. For clear, tailored guidance on what your project might cost, get in touch with our experts for a no-obligation consultation.
Below is a breakdown of both sides, based on typical small to mid-scale projects.
Infrastructure Build Costs
Typically 40% to 60% of the total data centre building cost
This includes everything needed to create a secure and functional environment for IT systems:
Site Preparation and Building Shell
Estimated share: 10% to 15%
Covers site surveys, physical construction, room conversion, fire-rated enclosures, raised flooring, and basic fit-out. For modular builds, this may be partially bundled.
Power Infrastructure
Estimated share: 25% to 30%
Includes UPS systems, batteries, backup generators, switchgear, PDUs, and electrical distribution. This is usually the largest single line item in the infrastructure budget.
Cooling Systems
Estimated share: 10% to 15%
Precision cooling systems such as CRAC or CRAH units, chillers, ventilation systems, and aisle containment solutions.
Racks, Cabling, Security and Fire Protection
Estimated share: 10% to 15%
Includes server racks, structured cabling, access control, CCTV, fire detection and suppression systems, lighting, and interior finishes.
Commissioning and Testing
Estimated share: 2% to 5%
Final testing of power and cooling systems, load tests, Tier-level verification, handover documentation, and training.
IT Equipment Costs
Typically 40% to 60% of the total project cost
This is often the largest cost category, especially in small deployments. It includes:
Servers and Compute
Estimated share: 25% to 40%
Physical servers used for hosting virtual machines, applications, databases, etc. High-performance or specialised compute nodes (e.g. for AI or analytics) raise this significantly.
Storage Systems
Estimated share: 5% to 15%
SANs, NAS, or direct-attached storage, depending on redundancy and performance requirements.
Networking and Firewalls
Estimated share: 5% to 10%
Switches, routers, load balancers, and firewalls. Some small sites also include edge security appliances and SD-WAN devices.
Software and Licensing
Estimated share: 5% to 10%
Operating systems, virtualisation platforms, backup software, and security monitoring tools. Licensing costs can be significant depending on vendor models.
Typical Split Example for a £500,000 Data Centre Project
| Category | Estimated Cost | % of Total |
|---|---|---|
| Infrastructure build | £220,000–£300,000 | 44%–60% |
| – Power & cooling | £175,000 | 35% |
| – Shell & fit-out | £90,000 | 18% |
| – Commissioning | £15,000 | 3% |
| IT equipment | £200,000–£280,000 | 40%–56% |
| – Servers & storage | £160,000 | 32% |
| – Networking & software | £90,000 | 18% |
Note: Actual breakdown depends on Tier level, redundancy, hardware specs, and project delivery method (traditional vs modular).
To get a more accurate estimate, please contact us for a consultation.
Build Timelines and Lifecycle Planning
Traditional on-premises data centres typically take 12 to 24 months to plan, design, and build. Modular or containerised facilities can reduce deployment time to a couple of weeks, depending on the complexity.
A well-built data centre is usually expected to operate for 10 to 15 years. However, key systems such as UPS batteries, cooling units, and power distribution gear will require periodic upgrades:
- UPS batteries: replace every 3 to 5 years
- HVAC systems: major servicing or upgrades every 7 to 10 years
- Fire and security systems: review and test annually
- Software and monitoring tools: updated continuously
Planning for these lifecycle costs upfront helps avoid unplanned outages and protects long-term investment.
Challenges of Building and Running Your Own Data Centre
Running an in-house data centre gives you full control, but it also means taking on all the responsibilities. From the early planning stages to ongoing maintenance, there are hidden demands that go far beyond buying servers.
Staffing and time
Managing a data centre requires specialised knowledge in electrical systems, cooling, power redundancy, physical security, and compliance. If you choose to build in-house, your IT team will need to take time away from core business operations or you’ll need to bring in external consultants and engineers. This adds cost and complexity.
Ongoing operating expenses
Even after construction, the data centre will incur high operational costs. These include electricity, backup systems, cooling, regular maintenance, insurance, on-call support, and physical security. Many businesses underestimate these recurring expenses.
Scalability risks
A common issue is overbuilding for future needs or underbuilding and outgrowing the facility too quickly. Overbuilding leads to wasted space, higher energy bills, and higher cost per rack. Underbuilding can force an early rebuild or relocation. Unlike cloud or co-location, in-house facilities are not easy to scale up or down without major disruption and capital investment.
Connectivity
Extending fibre connections to your facility can involve high setup costs and long lead times. You’ll also need to manage contracts with ISPs or carriers directly, adding to your team’s workload.
Compliance and certification
If your organisation handles sensitive or regulated data, you may need to meet standards such as ISO 27001, PCI DSS, or NHS Digital compliance. Preparing for audits, implementing controls, and maintaining documentation adds more responsibility and cost.
Colocation vs Building a Data Centre
Co-location and modular data centre solutions provide more flexibility without giving up security or performance. You get a professionally managed environment with the option to scale as needed.
Shared infrastructure, reduced costs
In a co-located facility, the infrastructure costs for power, cooling, fire suppression, and security are shared across many tenants. This keeps your operational costs more predictable and significantly lower than managing a private facility.
Rapid deployment and expansion
Modular data centres or containerised solutions allow you to deploy a facility in weeks, not months. Co-location providers offer reserved capacity, meaning you can add or remove racks as your requirements change, without committing to long-term overbuild.
Carrier connectivity and resilience
Most co-location sites are already connected to multiple carriers. You don’t need to pay for fibre installation or negotiate separate contracts. These facilities are designed to support resilient networking, including redundant paths and low-latency links to cloud platforms.
Compliance built in
Established co-location facilities already meet common compliance standards. You don’t have to build the framework from scratch or manage audits alone. This is especially useful for organisations in healthcare, finance, or government sectors.
Cost Examples for Building a Data Centre In-house
The following examples show estimated construction costs for small to mid-sized on-premises data centres in the UK.
Prices are based on a mix of infrastructure costs per square metre and per kilowatt of IT load. These figures reflect the cost of building the physical facility and associated power and cooling systems, excluding servers and IT equipment.
Mid-sized Enterprise Facility (465 m² / ~5,000 sq ft)
Tier II facility
- 160 racks at 5 kW per rack (800 kW total UPS-backed load)
- Build cost:
- 465 m² × £10,500 = £4.88 million
- 800 kW × £7,500 = £6.00 million
- Total: ~£10.9 million
Tier III facility
- 160 racks at 10 kW per rack (1,600 kW total UPS-backed load)
- Build cost:
- 465 m² × £10,500 = £4.88 million
- 1,600 kW × £12,500 = £20.00 million
- Total: ~£24.9 million
Small Data Centre (93 m² / ~1,000 sq ft)
Tier II facility
- 32 racks at 5 kW per rack (160 kW total)
- Build cost:
- 93 m² × £10,500 = £976,500
- 160 kW × £7,500 = £1.2 million
- Total: ~£2.18 million
Tier III facility
- 32 racks at 10 kW per rack (320 kW total)
- Build cost:
- 93 m² × £10,500 = £976,500
- 320 kW × £12,500 = £4.0 million
- Total: ~£5.0 million
Large Telco Room (46 m² / ~500 sq ft)
Tier II facility
- 16 racks at 5 kW per rack (80 kW total)
- Build cost:
- 46 m² × £10,500 = £483,000
- 80 kW × £7,500 = £600,000
- Total: ~£1.08 million
Tier III facility
- 16 racks at 10 kW per rack (160 kW total)
- Build cost:
- 46 m² × £10,500 = £483,000
- 160 kW × £12,500 = £2.0 million
- Total: ~£2.48 million
Notes:
- £10,500/m² reflects a typical UK all-in build cost (power, cooling, fit-out) for small to medium Tier II–III projects.
- £7,500/kW for Tier II and £12,500/kW for Tier III are reasonable estimates for UPS-backed, fully integrated electrical systems.
- These figures exclude the cost of servers, storage, and networking hardware. Including IT equipment would increase totals by 40–60%.
What’s the Difference Between a Data Centre and the Cloud?
A data centre is a physical facility where an organisation houses its IT infrastructure. This includes servers, storage systems, networking equipment, cooling, power systems, fire protection, and physical security. When a company owns and operates its own facility, it is typically called an on-premises or on-prem data centre.
The cloud also runs on data centres, but the difference is in ownership and access. Cloud providers like AWS, Microsoft Azure, and Google Cloud operate very large, centralised data centres and rent out computing resources to customers over the internet.
In short, an on-prem data centre is built and managed by your organisation. A cloud service runs in someone else’s facility and is accessed as a utility.
On-Prem vs Cloud: Cost and Control
When comparing on-premises data centres and the cloud, there are major differences in cost structure, scalability, and control.
| Factor | On-Premises Data Centre | Cloud |
|---|---|---|
| Upfront cost | High (often £500,000 to £1 million for the facility build) | Low (no construction or hardware costs) |
| Ongoing cost | Power, maintenance, hardware upgrades, staffing | Usage-based billing, network costs, hidden fees |
| Scalability | Limited by hardware and space | Very fast and flexible |
| Control and compliance | Full control of systems and data location | Depends on provider; less visibility |
| Long-term cost efficiency | Often cheaper for predictable workloads | Can become expensive if not optimised |
The cloud is ideal for short-term, flexible projects and development environments. For predictable, always-on workloads, building or maintaining your own data centre can reduce long-term costs.
Final Thoughts
Many businesses start with a small server room and outgrow it quickly. As systems become more critical and compliance requirements increase, having a reliable and secure infrastructure becomes essential.
That might mean expanding an on-prem data centre, moving into colocation space, or choosing a hybrid approach.
Before investing, compare the long-term costs, risks, and performance needs of different options.
Contact Secure IT Environments to speak with an expert about your current data centre plans or future upgrades.
Fill in the form on our contact page to speak with a specialist about your project.
