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Data Center Location: 4 Things to Consider

In the real estate market, they say location is important. It’s no different with data center and co-location facilities.
The Midwest, specifically Iowa, is a great location for multi-tenant data centers or co-location facilities. These facilities can hold millions and even billions of dollars in computer equipment, so it’s imperative they are in a safe and secure location.
Here are four reasons why Iowa is the perfect data center location:

1. Low-cost power

Electricity is everything when it comes to a data center. Without it, equipment can’t function, backups can’t be in place, and the equipment cannot be kept at the proper temperature.
The Midwest has some of the lowest power costs in the United States, which is a key factor in considering the expense to operate a co-location facility. The cost of power in Iowa is significantly cheaper than in the coastal regions or larger metropolitan areas.
For example, California ranks fifth in the cost to produce natural gas and seventh for electricity, compared with 40th for natural gas and 37th for electricity in Iowa, according to the U.S. Energy Information Administration.
It’s the supply and demand theory: Power is cheaper in Iowa because it costs less to produce and fewer people are using it.
Iowa also is home to many renewable energy sources. The state is the second-largest producer of wind energy in the United States, according to the energy information administration. The amount of Iowa’s electricity produced by coal declined from 76 percent in 2008 to 47 percent in 2016.
Renewable energy is important because it has fewer effects on the environment. With the large amount of power a co-location facility requires, it becomes even more necessary to be a good environmental steward. Wind energy provided almost 37 percent of the state’s electricity in 2016, which was a larger share than any other state.

2. Safe, central location

The data center needs to be in a place where it is safe from natural disasters such as hurricanes, earthquakes, tsunamis and floods – any facility should be built outside of a 500-year flood plain area.
Man-made issues such as the potential for terrorist attacks also need to be taken into account. In a less populated area, there is less risk because it is less likely to happen.
Iowa, specifically central Iowa, is also easy to access. It’s about a three-hour plane ride away from almost anywhere in the continental United States. It’s also at the crossroads of two major interstates, which is important for data center workers who may have to drive to the site.

3. Taxes

Data center owners will pay fewer taxes to have their facilities in Iowa thanks to a 2009 law.
Iowa lawmakers passed a law that excludes data centers of at least 5,000 square feet (that meet investment guidelines and design requirements) from paying sales tax on the sale or rental of computers, equipment and property related to computers that are necessary for the maintenance and operation of the business. Backup power generation fuel and electricity for the data center’s use also are exempt from sales tax.
Computers and other equipment used for the data center also are exempt from property taxes under Iowa law, for those data centers that meet the above requirements.
This could mean millions of dollars in savings for larger companies that have more equipment.

4. Employee prospects

The Midwest and Iowa are home to a large pool of highly educated employees with computer talent and expertise.
The cost of hiring an individual here also is cheaper than in larger coastal cities because the cost of living is cheaper.
As you can see, moving or opening a facility in Iowa can be a win across the board: It’s less expensive to operate, it’s a safe and central place to be located, and the workforce is ready and able to get the job done.


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