Skip to main content

What To Look For In A Data Center Location

Whether you are a data center developer, operator, or an enterprise, the site location of your data center can be a crucial decision. It needs to be in a manageable and controlled location: security is a must and environment control is a plus. Below are some factors to consider when choosing a data center location in order to avoid making costly mistakes.

Energy and Construction Costs

Energy costs are the biggest expense of daily data center operation and different regions have different prices for energy. These energy costs are on the rise, mostly due to the constant growth of data center traffic and electricity prices. An easy way to reduce costs is to seek out an area that has naturally low rates; this includes having moderate temperatures throughout the year. Too much heat can require more energy to keep your data center cool. Less populous states also tend to have lower energy costs, but they are further from major markets.

Construction and labor costs depend on where your data center will be located. Look into the construction industry maturity, and labor availability and cost. A mature construction industry yields low prices because the industry is either at its peak or just past it, meaning growth prospects are few and far between.

Taxes and Incentives

Although they may not be the driving force for choosing a location, state taxes and incentives can play a role in choosing one location over another.

Sales taxes are evaluated at both state and local levels, and can be charged on construction activity as well as purchases of machinery. Property taxes are mostly assessed at the city, county, and school district levels for both real and personal property. As you can imagine for a high priced building, these can add up quickly; however, these taxes are comparable for most states, so taxes may not be a deciding factor.

However, incentive programs can make a big difference. Many states have customized incentive programs for Data center operations. These incentives can include sales tax exemptions, personal property statutory exemptions, property tax abatements, and others. They can focus on full or partial exemption of sales taxes on equipment, construction materials, and in some cases purchases of electricity and backup fuel. Even if the state does not have specific incentives for data centers, they might still have some for new businesses or alternative energy, so be aware when shopping around.

Power Reliability and Sources

When it comes to power, you need it to be continuous, clean, and uninterrupted. Do research into statistics on the reliability of the power grid, and availability of backup systems for your top candidates. If outages or brownouts are frequent, you’re going to run into a lot of compensation payout (depending on your SLA), or even worse, potential damage to computing equipment.

If solar, geothermal, hydroelectric or other alternate energy sources are available, they can provide additional resiliency to the grid, or even help power your data center, whether directly or indirectly. In many cases, solar and wind energy have reached parity with coal and natural gas, making them a cheap source of energy and a potential differentiator for a green data center.

Disaster Recovery

It may seem obvious, but you need to make sure the data center is not located in a place where many of natural disasters take place. Companies need to safeguard their mission critical data; and a disaster recovery or secondary data center site doesn’t do much good if it can be taken down by the same hurricane that destroys the primary data center.

Unfortunately major markets are not located in natural disaster free zones. Key cities on the east coast and in the south have hurricanes, the Midwest has tornadoes, and the West coast has earthquakes. So, sometimes you just have to bite the bullet and use a data center that is closer to your city to best serve employees, customers, and data center operators.

However, the data center needs to have substantial distance between it and major airports, government buildings, banks, downtown buildings, dams, bridges, and large malls. These can cause electromagnetic interference, which can interrupt or degrade the normal operation of an electronic device, and could lead to latency issues.

Latency and Proximity to Fiber

Sometimes disaster recovery is your main focus, but other times latency needs to be. Latency is how much time it takes for data to get from one designated point to another. It can be affected by how close the data center is to fiber lines.

Fiber optic connectivity can handle high-speed, high-volume data transmission, making major fiber intersections a great location for data centers. They transfer data by translating bits and bytes into literal flashes of light, which bounce along a transfer cable. Access to premium fiber connectivity infrastructure ensures minimal latency. You can obtain maps that show fiber optic cable locations, and if there are not any in the vicinity, you can always ask fiber providers if it would be possible to extend those lines.


A factor that is not as obvious is clean air within the facility. The amount of outside air that is circulated into the facility can actually be a factor, because pollution or poor air quality can affect or degrade equipment within the facility. Clean Air Suppression systems, fully redundant (N+1) cooling systems, humidification/de-humidification systems, and 100% SLAs guaranteeing the environment are a must, especially if your location has many airborne pollutants.

Carrier Neutrality

Carrier-neutral data centers, depending on distance, can connect to a variety of providers and networks. When the data center is carrier-neutral, it adds to the overall strength of the network, allowing you to combat issues like latency. It also allows customers to choose their preferred provider, and keeps the entire facility online when one Internet provider is experiencing an issue.

Decision Time

When choosing a location for your data center be sure to narrow down your company’s specific requirements, then based on those, investigate various locations. You can even set up some site visits and meetings so as to start thinning your selections; during this stage, meet with various government agencies or service providers in order to conduct a detailed analysis. After narrowing down your list, start doing a comprehensive investigation into those remaining sites. The more informed you are, the better decision you will make.