Changing Needs Complicate Data Center Refresh

In the 1990s and early 2000s, Eastern Pennsylvania enterprises were ahead of the curve in developing data centers to support the upcoming digital age.  That’s no surprise for a region with progressive, high-growth leaders in key industries such as healthcare, biotechnology, and finance.

As a result, a passel of data centers was built in our region around Y2K.  From the suburbs west of Philadelphia, through our home Reading, and out to Harrisburg saw dozens of data centers sprout up.   Nearly all of which are still in operation. 

Data centers typically have about a 20 year useful life without capital intensive modernization.  Many of the corporate data centers in Pennsylvania are near the end of their useful life, are taking up too much real estate due to more efficient computing and cloud adoption, and would cost a bundle to modernize, especially for the AI era.

Direct LTx knows these issues well, having invested over $20 million in recent years to refresh our power infrastructure and other systems to prepare us for the next two decades.

And we’re lucky we undertook those projects when we did, as costs and supply chain issues have each rocked those looking to upgrade or rebuild their data centers. 

Unsurprisingly, for new data centers, costs have skyrocketed.  According to Construct Connect News data center construction costs per square foot surged 47% from August 2024 to August 2025.

While costs for labor, supplies, equipment, permitting, and a dozen other items have definitely gone up, the skyrocketing prices also reflect a larger percentage of AI-ready data centers being built.  Preparing for that level of power density costs around twice as much (per square foot) as a traditional data center, as high-density power infrastructure is simply a lot more expensive than traditional data center power.    

Supply Chain Issues:   On the way to recovering from COVID, the supply chain was rocked once again, this time by AI.  Microsoft, Meta, Alphabet, and Amazon are planning to spend almost two-thirds of a TRILLION dollars on their data centers 2026, $650 billion to be exact.    It was just two years ago, 2024, when they broke through the $200 billion mark for the first time.   As a result, power equipment provider Vertiv has an order backlog of over 100% of annual revenue. 

New White Papers Explore Your Options:   If your legacy data center needs upgrades or is otherwise a mismatch for your current and future needs, you are far from alone.   A new Direct LTx white paper: Replacing Your Aging Data Center? " Reviewing the Options and Strategies Available to You" is now available.

Or reach out to us for a copy at strategy@directLTx.com.