How To Choose a Data Center Location | 5 Key Considerations (2024)

New data center construction continues at a rapid pace, driven primarily by public cloud and colocation providers. According to Synergy Research Group, spending on data center construction, leasing, and equipment increased 13 percent year-over-year in 2022.

Hyperscalers aren’t the only ones building out new data centers. Enterprise and government organizations also need to maintain private data center environments that are customized to their needs. Private data centers also provide the security and control needed to meet strict compliance requirements. As their existing data centers reach capacity, many of these organizations are constructing new facilities to meet growing demand.

Before breaking ground on new construction, organizations must choose a location. There are many factors to consider when making a selection.

1. Power Cost, Reliability, and Availability

Data center power costs and sources are a major component of their overhead. Because electricity rates vary significantly in different areas of the U.S., choosing a region with relatively low costs is important. Even relatively small savings per kilowatt-hour can quickly add up. Organizations with sustainability (ESG) objectives may also wish to build their data centers near solar or wind farms.

Reliability is also critical, and it’s impacted by several variables. Extreme weather events can knock out power, and grid operators can impose rolling blackouts if demand exceeds supply. Some areas are restricting data center power consumption due to limitations on electricity generation and distribution. As a result, organizations should consider building their data centers in secondary markets with abundant, reliable power.

2. Connectivity Options

Fast, reliable Internet connectivity is as important as power. If a data center has access to just one service provider, any outage will result in downtime. However, many areas of the U.S. are dominated by one ISP. In those areas, data centers are more vulnerable to outages and have limited ability to negotiate favorable pricing. Organizations should investigate connectivity options and select a site with access to multiple ISPs.

3. Disaster Risks

Although human error is the cause of most outages, natural disasters represent one of the greatest risks data centers face. A major disaster can result in an extended outage that costs hundreds of thousands or even millions of dollars. Even if a data center is constructed to withstand these threats, it may be inaccessible due to infrastructure damage or flooding.

Few locations are immune to natural disasters, but some are safer than others. All else being equal, it makes sense to select a site with lower disaster risk.

4. Network Latency

If network latency is an issue, locating the data center close to users may make the most sense. Every time data has to travel 100 miles, it slows down by about .82 milliseconds. If the distance between the data center and users is great, those slowdowns can add up and become noticeable with latency-sensitive applications. The network infrastructure connecting the data center to users also plays a role, as data doesn’t travel the shortest geographic path.

However, network latency should be a lower priority than power, connectivity, and disaster risk. Organizations can use a content delivery network or edge data center to bring data closer to users if necessary.

5. Scalability

Demand for data center services isn’t likely to decrease. When constructing a new data center or choosing a colocation facility, organizations should consider the need for additional space in the future. Urban areas and their close suburbs may have little available real estate for expansion. Secondary markets often provide more room to grow.

Enconnex: Your Partner for Data Center Buildout

Once you’ve selected your data center location, Enconnex is here to help you throughout the buildout process. From PDUs, aisle containment, and network cabling to racks, cabinets, and UPSs, Enconnex offers high-quality solutions to meet every need and budget. Contact our data center infrastructure specialists to discuss the details of your project.