The Minneapolis Data Center Market

The Minneapolis Data Center Market

The Minneapolis Data Center Market is growing. The continued business success in the area and investment by data center operators has transformed this once secondary data center city into a logical choice for small, medium, and large sized companies. Historically, a large number of companies have built their own data centers in the Minneapolis area and still operate them today. This presence of enterprise users is due to the large number of Fortune 1000 companies that call Minneapolis home. Organizations like Target, United Health Group, US Bank, Thomson Reuters, Ecolab, Delta, VISI, and a number of other companies all operate their mission critical facilities in the Twin Cities and greater surrounding areas.

From a geographic perspective, much of the data center development has occurred in the Southern half of the city. While some data center providers have a presence downtown, the investment focus over the last several years has taken place in areas like Chaska, Eden Prairie, Eagan, and Edina.

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Power Overview

The main power provider serving Minneapolis and the surrounding Midwest region is Xcel Energy. Commercial electricity in Minnesota costs around 20% lower than the national average and data centers do not pay sales tax on electricity, which also lowers the cost. Additional cost savings are available to colocation providers in the economic development contracts between local electric providers and municipalities. Xcel is also actively exploring alternative/renewable sources for their fuel mix. Data center users are increasingly focused on finding power providers promoting renewable energies. In 2015, 17% of energy delivered came from wind generation, and the company plans to raise that to 24% by 2020. Xcel is also utilizing solar, hydroelectric, and biomass generation. Additionally, the city’s cooler climate enables a high number of free cooling days, with some studies estimating approximately 315 days of the year in which free cooling can be achieved.

Connectivity Overview

Minneapolis has a well-developed fiber infrastructure, with an abundance of metro lines and long haul fiber routes in the area. Carriers such as CenturyLink, Level3, Neutral Path, Sprint, Windstream, XO Communications, and Zayo run long-haul routes connecting Minneapolis to cities like Milwaukee, Chicago, Detroit, Indianapolis, St. Louis, Des Moines, and Omaha, and also to markets on the East and West Coast. In the Twin City metropolitan area, Zayo has an expansive fiber footprint, along with CenturyLink, Cologix, Enventis, Level3, Windstream, and XO Communications. Through long haul, metro, and dark fiber, the majority of the Minneapolis market has access to a variety of quality fiber providers.

Hazard Risk Overview

Minneapolis has a relatively low risk of natural disasters when compared to other major US markets. The city has almost no history of earthquakes, and has no recorded earthquake events with a magnitude over 3.5. Minneapolis is also free from any hurricane threat given its protected inland position within the United States. The northern tip of tornado alley does encompass Minneapolis, and the city does have a history of occasional tornadic activity. The risk, however, is much lower than many other areas in tornado alley.

Minneapolis DATA CENTER MARKET OPTIONS

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