Water protects buildings and people. In most jurisdictions, it's required by code whether you have something more sophisticated or not. And if it's not required, your management -- and probably your insurer -- will want you to put it in anyway simply to avoid liability. The real question here is one of cost. "Dry pipe, pre-action" sprinklers avoid the risk of having pipes full of water running above your equipment, as well as the risk of a sprinkler head leaking or breaking, especially when no one is around. But in a data center of your size, it may be difficult to cost-justify pre-action, both in dollars and in the space for the valves and controls. Because your room is not large, I would check with your MEP engineer to see if the heads can be located on the walls, instead of in the ceiling. This, at least, would keep pipes and joints from being right above computer hardware.
The inert gas systems are meant to protect equipment. They react more quickly than sprinkler heads, which don't open until flames have actually raised the temperature enough to open them. By then you have a pretty good fire going. Inert gas actually gets into the cabinets and equipment and either absorbs the heat or deprives the fire of oxygen, depending on the product used. Obviously, if the gas puts out the fire at the source before it spreads, it also protects people and the structure, but most codes don't look at it that way. Code authorities are concerned about what happens if the fire does not go out, or if it reignites after the gas has been dumped. Hence, the requirement for sprinklers no matter what else you may have -- even if you have "reserve tanks" of suppressant.
Gas-based systems depend on the volume of the room, which in your case would seem to be quite small. This could probably be handled with wall-mounted gas cylinders, rather than a fully piped installation. This would be much less expensive. But the hidden cost in an inert gas solution is what must be done in the room construction. Everything must be sealed. Every duct going through the room must have automatic fire dampers. There must be alarms, automatic shutdowns of power and air conditioners, control systems with smoke detectors and enunciator panels, etc. Even the ceiling tiles must be clipped down to keep them from being blown out by the force of the gas release, which is quite dramatic.
In short, there is no "correct solution." But hopefully this will give you a little better idea of what you need to be aware of in deciding what's best, and most justifiable, for you.
This was first published in November 2005