The Denver Data Center Market

The Denver Data Center Market

Denver is among several secondary data center markets that has seen a substantial increase in activity over the last few years. Denver offers data center professionals a highly reliable location with a very low risk of natural disasters. The city’s high elevation also creates a cooler climate, allowing data center operators to take advantage of free cooling almost year-round. Denver also benefits from its central location, with flight times under two hours from most Central and West Coast cities. This makes Denver ideal for a disaster recovery location, or for a primary colocation solution.

Denver is home to 30 colocation data centers, from 15+ providers like CoreSite, Cyxtera, Digital Realty, Equinix, Peak10/ViaWest, and Stream. Data center development has occurred in two primary areas. While some data center growth has occurred downtown, with providers like CoreSite, Peak10/ViaWest, and zColo present, the majority of activity is focused on the southern suburb of Centennial. Peak10/ViaWest is the most heavily invested in the Denver market, operating nearly 60 MW across five data centers in the area. Multiple enterprise users have chosen to locate their data centers in Denver, including Lockheed Martin, Time Warner, Nissan, and Honda.

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Power Overview

Denver’s primary power provider is Xcel energy, whose rates and service is regulated by the Colorado Public Utilities Commission. IREA and United Power are also available in certain areas of the city. Most of Denver’s power is generating from coal, representing 46% of the fuel mix in 2016, with 25% from natural gas, 23% from wind, and 6% from hydro and solar. Electricity rates in Denver average around $.08/kWh.

Tax Incentives Overview

Colorado offers no official tax incentive for data center development, while some incentives may be possible on a case-to-case basis. In early 2015, Colorado officials initially approved a bill to provide tax breaks for data center development, but the bill was later voted down. Officials have shown interest in possibly reopening discussions on data center tax incentives at a future time.

Hazard Risk Overview

Denver’s central location and elevation makes the market relatively safe from inclement weather and natural disasters. Although uncommon, Denver has had several low-magnitude earthquakes and tornadoes. Heavy snow can also occur in the area.

Denver DATA CENTER MARKET OPTIONS

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