Choosing the perfect data center location is a little more strategic than the "dart and map" method some may think providers use. In fact, there are many different factors that affect the decision-making process in order to ensure that new facilities are cost-efficient, sustainable and able to address local service demands.
Before PEER 1 Hosting decides where to build a new facility, we talk with customers, prospects and partners to determine where companies are looking for hosting support. Once we identify a market need in, say, New York City, we look into opening a facility in that market. But there are many variables that determine the actual location of the new data center within New York City.
First, the location must make sense in terms of what service it will be used for. For example, a facility used for colocation will better serve end users close by, so its proximity to end users is very important. If the data center is going to house trading equipment for Wall Street, then that facility needs to be as close to Wall Street as possible. Alternatively, a data center used for hosting can address a much wider radius of users. These facilities can be outside of major cities, and are in many cases, but they are built in close proximity to a highly-skilled IT talent pool to properly staff the facility.
Another element that plays a role in the decision-making process is the number and severity of natural disasters in a considered region. For instance, areas prone to tornados, flooding or hurricanes will raise a red flag. However, even with that consideration, we are sometimes still caught off guard. Last year's Hurricane Sandy battle was an unfortunate reminder that weather can be extremely unpredictable (luckily, PEER 1's employees and customers worked together to lessen the storm's impacts). Taking volatile weather into account is especially important, as data center outages can cost an average of $5,600 per minute!
Finally, utility costs are very important to keep in mind when choosing a data center location; power costs are one of the largest expense data centers face, so a temperate environment where you can take advantage of “free cooling” is much more conducive to data centers. Building in a location with cooler average outdoor temperatures can help keep cooling expenses low because it allows facility managers to implement energy efficient cooling systems such as air or water side economizers to take advantage of low outside ambient temperatures. We've seen large companies like Facebook and Apple migrate their data centers to the North West over the past few years to take advantage of the area's cool climate.
To sum up, the perfect data center location is somewhat of a formula and will not be the same for every company. Certain elements take precedent over others when strategizing where to build a new facility. PEER 1's data centers located in the south and in Los Angeles face a steeper hill when it comes to climate control, where our New York City location's rent is extremely high. It's all a matter of finding an area that offers a company the greatest number of benefits.