Site Selection Strategies for Enterprise Data Centers

Taxes, incentives, power costs and facility construction costs drive cost-effective site selection



The ever-increasing need for data exchange, storage and security is broadening demand for data centers in the U.S., but one solution does not fit all in the world of data center real estate. The Site Selection Strategies for Enterprise Data Centers report provides in-depth coverage on how taxes, incentives, power costs and facility construction costs drive cost-effective site selection, which can result in $140.9 million of savings over the life of a project.

  • Enterprise data centers require significant capital investment to build, own and operate. Smart money will target markets with affordable power and land costs, low net taxes after incentives are applied, plentiful labor and inexpensive construction costs.

  • A typical 5 megawatt (MW) enterprise project in the U.S. costs $270.1 million over a 10-year period.  Potential savings of up to $140.9 million is available to site-selection savvy users.

  • The low cost markets for enterprise data centers are: Atlanta, GA; Charlotte, NC; Cheyenne, WY; Colorado Springs, CO; Des Moines, IA; Omaha, NE; Portland, OR; Quincy, WA; Salt Lake City, UT; and Tulsa, OK.

  • IT hardware and facility construction costs are the most significant capital outlays in an enterprise data center project - accounting for 70.8% of the total project cost on average. Power costs and state and local net taxes (after incentives) account for 21.9%, and combined land acquisition and labor costs account for the remaining 7.3% of the total.

  • While low-cost markets are highly sought after for data center real estate, non-monetary considerations such as proximity to a company’s headquarters or other data centers, fiber density and environmental risk-factors can sway the ultimate decision.

  • The optimal data center portfolio mix for mission critical users evolves over the life of a company or as technology advances. Enterprise data centers remain a component of medium-to-large web and media company’s data center portfolios - despite the increasing adoption of third-party colocation solutions (retail, wholesale and cloud-based).

 

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