There’s been a spate of data centers popping up in rural parts all over the country, and several more being built in colder climes like Iceland. But did you know Sioux Falls, S.D., -- not ruralville and no Iceland, but a mid-sized city with cold winters – is the best American city for data centers? That’s the finding of a recent study conducted by The Boyd Company, a Princeton, N.J. company that provides independent site selection consulting services to North American and overseas corporations.
The findings focused on costs and security, among other criteria. More specifically, the study’s starting point were operating costs scaled to a hypothetical 125,000 sq. ft. information assurance center within the banking and financial services industry. You can see the whole study, “Banking & Financial Services: A Comparative Cost Analysis for Information Assurance Operations,” here. In the study, The Boyd Company writes that the analysis provides “an independent and authoritative point of reference for the corporate planner’s assessment of comparative operating cost levels in each of the surveyed sites. The format of the cost exhibits will allow the corporate planner to further tailor the cost data, occupancy assumptions and staffing levels to reflect alternate scales of operation and growth expectations.”
Runners up were Tulsa, Okla.; Ames, Ia.; Council Bluffs, Ia.; Bloomington, Ind.; Albuquerque, N. Mex.; San Antonio; Omaha; Colorado Springs; and Denton, Tex.
In this article on the study in American Banker, The Boyd Co. principal John Boyd, Jr., is quoted as saying the banking industry will shift to smaller, lower-cost cities in the Midwest largely because of low-cost markets. He also notes that other companies want to be “geographically neutral," pointing to Google’s recent investment in data centers in Council Bluffs, Ia., and Microsoft’s move to put a data center in San Antonio.
Not only are lower costs a factor. The states and cities on the list are in areas perceived to have fewer natural disasters compared to coasts (hurricanes), California (earthquakes) and Manhattan and other major cities that could be the victim of terrorism or power grid attacks, Boyd notes in the article.
In the study, it also is noted that smaller market, lower risk locations in the mid-continent region allows for centralized and shorter disaster recovery fly-ins from either coast and include “a robust telecommunications infrastructure; the ability to recruit specialized computer security skills within the local labor market area, including those trained at National Centers of Academic Excellence in Information. Assurance Education (CAEIAE) certified by the National Security Agency and the Homeland Security Department; affordable land acquisition costs; competitive energy costs; quality-of-life considerations of transferees and dependents; adequate air service from multiple national carriers; and other local and state business climate considerations.”
As for costs – according to the study – New York is most expensive city for data centers, with annual operating costs for a typical facility estimated at $23.67 million. San Francisco followed closely behind at $19 million and Newark, N.J. was third at $16 million. That compares to Sioux Falls, S.D., with annual operating costs at $11.19 million, Tulsa, Okla., came in at $12.06 million, and Ames, Ia., at $12.09 million.