The Best And Worst Cities For Data Centers

A new report looks at 35 cities as potential homes for data centers and analyzes which are the most and least expensive.

Darrell Dunn, Contributor

October 21, 2006

3 Min Read

Far-Flung Locations
Even companies that don't operate their own data centers want the benefits of low-cost locations. General Motors uses EDS, Hewlett-Packard, and IBM to host and manage its data centers. The automaker's domestic data centers are housed in places like Plano, Texas; Auburn Hills, Mich.; and Atlanta. "Our suppliers know it's incumbent upon them to ensure they are as low cost as possible in terms of utilities, labor, and floor cost," says Mark Hillman, GM's director of global data center operations. GM's also establishing data centers in Singapore, Germany, Australia, and India.

While there's no rush to move data centers out of major U.S. cities, "new data center projects will be the No. 1 generator of new high-paying jobs in smaller markets," consultant Boyd says.

For some companies, moving data center operations to a distant state isn't an option. Many want the center to be within driving distance of their metro area offices. The Baltimore Technology Park, for example, provides data center collocation services to companies in Maryland, northern Virginia, Washington, D.C., New Jersey, and New York, says Jim Weller, VP of business development.

Talent Hunt
Many potential customers have had a hard time finding space to expand their data center operations, particularly space that can accommodate high-density server installations. So the Baltimore Technology Park is expanding its floor space from 5,000 to 15,000 square feet, and doubling its power supply to meet the demand. "Northern Virginia and New York are risky markets" for a data center operator, Weller says. "But the talent base in Baltimore is sufficient, and much lower in cost than some primary markets."

Dan Blake, president and CEO of CourseMax, which provides hosted software to schools, recently moved its data center from Ashburn, Va., to the Baltimore Technology Park. CourseMax's internal development team is located mainly in St. Petersburg, Fla., where salaries are lower than in major East Coast cities. But several executives are moving to the new headquarters in Baltimore. "Baltimore and D.C. are getting further and further away from each other because of traffic," he says. "And the logistics of trying to work in northern Virginia have become increasingly difficult."

As his company grows, Blake says he may locate a data center more toward the middle of the country. "There are many smaller cities in the Midwest and elsewhere that are dying to grow their technology economy," he says. "There's no reason why the flattening world can't benefit them, too."

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