Colocation Cost Calculator — $/kW vs $/Rack
Compare colocation pricing models by normalising $/kW/month and $/rack/month to true monthly and annual cost.
Inputs
Applies to both quotes — cross-connects, remote hands, IP transit.
Average consumption as a share of contracted power.
Results
- Cheaper quote
- A — per kW
- Quote A — per kW, monthly
- $8,000.00
- Quote B — per rack, monthly
- $8,500.00
- Total contracted power
- 50.0kW
- Effective cost per kW actually used
- $228.57/mo
Quote A (per kW) is cheaper by $6,000.00 per year.
$96,000.00 per year
$102,000.00 per year
What you really pay for the power you consume, not contract.
Two pricing models, one decision
Colocation is quoted either per kilowatt or per rack, and the two are hard to compare by eye. The model that wins depends entirely on your power density:
- Per kW pricing favours low-density deployments. If your racks draw 3 kW, you pay for 3 kW.
- Per rack pricing favours high-density deployments, because the rack price usually includes a power allowance you may as well use fully.
The crossover is simply the rack price divided by the per-kW price. At $800 per rack and $150 per kW, that is 5.33 kW — below it the per-kW quote wins, above it the per-rack quote does. Knowing your own crossover point is the most useful number to take into a negotiation.
Contracted power versus consumed power
This is where colocation budgets quietly break. You are almost always billed on contracted power, not what you draw. Contract 5 kW per rack, average 3.5 kW, and 30% of your power spend buys nothing.
The effective cost figure above makes that visible: it divides the bill by the power you actually consume. It is usually a much larger number than the headline rate, and it is the honest basis for comparing colocation against on-premises or cloud.
Some providers offer metered power — you contract a maximum but pay for actual draw. That transfers risk to you in a useful way if your load is genuinely variable, and it is worth asking for.
Costs that are not in the headline rate
The rate per rack or kW is rarely the whole bill. Budget for:
| Item | Typical cost | Note |
|---|---|---|
| Cross-connects | $50 - $300/mo each | Per connection; adds up fast in a carrier-dense facility |
| Remote hands | $100 - $250/hr | Often with a minimum charge and out-of-hours multiplier |
| IP transit | Varies widely | Usually billed at 95th percentile, not average |
| Setup / installation | One-off | Frequently negotiable, especially on longer terms |
| Annual escalator | 2 - 5% per year | Compounds — check it against a five-year total |
Questions worth asking before signing
- Is the quoted power A+B or total?"5 kW redundant" can mean 5 kW usable across two feeds, or 5 kW per feed. The difference is a factor of two in what you can actually deploy. The PDU load calculator shows why this matters.
- What happens if you exceed the contracted draw? Overage rates are often punitive, and some contracts allow the provider to cap you.
- Is cooling capacity guaranteed at your density? A facility may sell you 10 kW in a rack it cannot actually cool without containment.
- What is the escalator, and does it compound? A 4% annual increase over a five-year term is a 22% increase by the end.
- What are the exit terms? Notice periods and de-installation charges make a cheap contract expensive to leave.
Sanity-check the density first
Before comparing quotes, confirm the density you actually need. Racks are often contracted at a density the deployment never reaches, which makes the more expensive quote look better than it is. Work out real power draw per rack first, then compare.