How to Succeed in Data Center Site Selection

03/09/2015

Even as colocation and cloud computing increase in adoption with data center users, there are still companies that build, own and operate their data centers. If you've been given the task of helping your company or client complete this process, paying attention to these tips will keep you on the right path for the selection of your data center market and site.

Start Early

Navigating your company through selecting a market and delivering a data center is a lengthy process. Chances are they'll be a high level of expectations and executive oversight on the project as well. You'll want all the time you can get.

Pick Great Teammates

Finding excellent partners to help from the beginning will save you time and stress. And they're out there. A handful of consulting firms are experts in helping to create rock solid IT strategies when needed. Several commercial real estate firms have deep expertise in guiding companies through evaluating and acquiring this strategic real estate. Third party validation goes a long way when your company's capital and reputation are on the line.

Buy Big

Large companies that want to own their data center want to own their future as well. If you're buying dirt, grab more than you need. It will ensure a good buffer between you and whoever your neighbors turn out to be.

Keep Perspective

While leaving nothing on the table is important in the negotiating process, recognize that the cost of land is a rounding error when considering the total cost of the project (if buying). Losing out on the ideal location for your data center for a couple of bucks will cost you much more in the big picture.

Taxes are on your Side (seriously)

Communities are serious about positioning themselves to win data center projects, and the quickest way they can improve their position is by offering favorable tax incentives. Several states have been working hard to produce legislation to do just that since the beginning of 2015. See the list below:

  • Colorado – Data Center Sales Tax House Bill 1258 recently approved
  • Illinois – Currently drafting legislation for data center incentives
  • Nevada – Senate Bill 170 introduced, stating partial sales tax and abatement on investments of up to $250M
  • North Carolina – Bill currently drafted creating tax breaks for data center electricity consumption
  • North Dakota – Passed bill for data center sales tax exemption

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