"Businesses are being priced out of locations like Boston, San Diego, and New York," says John Boyd Jr., a consultant with Boyd. "The idea of attracting and retaining a workforce in a small city in the Midwest today is actually quite appealing."
With businesses already overwhelmed by escalating data center costs and complexity, it's not illogical to believe they'll increasingly turn to places like Iowa, Nebraska, Oklahoma, Texas, and South Dakota to reduce the corporate burden. According to the Boyd study, it costs 45% more to run a similar-sized facility with like-sized staff in New York than Sioux Falls, S.D. A Web security manager in San Francisco will cost you $152,000, but only $122,000 in San Antonio, Texas. A data security analyst manager in Albuquerque, N.M., can be had for $100,000. In Boston, the position pays $119,000.
Land, utility prices, taxes, and travel all generally cost more in New York and California than in New Mexico or Colorado. And there's the convenience of a central time zone and shorter flights to either coast. And while Dorothy might have had to tangle with tornadoes, the heartland of America is less prone to suffer damage from hurricanes and earthquakes.
The best talent generally succeeds and is rewarded regardless of the person's geographic location, and smart businesses will always find ways to accommodate those individuals. But when faced with a data center project that will require 50 or more midlevel engineers and analysts, the difference between spending $7 million a year to staff a 125,000 sq. ft. data center in Chicago and $5.6 million for the same-sized staff in Sioux Falls, S.D., will have to be considered.
InformationWeek on Monday will look at the Boyd report and consider where data center investment is currently hottest. It's certainly not all centered in the breadbasket. Business leaders know the cost of technology can be a high-risk and high-reward game. Evaluating new markets should be a commonsense strategy to reduce the front-end risk of data center expansion.