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The colocation market in Arizona is experiencing a significant surge, with Phoenix emerging as a hotspot for data center providers and organizations seeking reliable and efficient colocation solutions. 

Let's explore the current state of the colocation market in Arizona, highlighting the factors that make it an attractive location for both data center providers and businesses in need of colocation services. 

Growing Market Size and Potential 

According to a report by Arizton, the U.S. data center colocation market is projected to reach $11.54 billion by 2028, with a compound annual growth rate (CAGR) of 6.70% from 2022 to 2028.  

Arizona, specifically Phoenix, ranks fifth among the top 20 data center markets in the country based on sales volume. This growth highlights the enormous potential and opportunities available in the Arizona colocation market. 

Favorable Business Environment 

Arizona offers numerous advantages that make it a highly desirable colocation destination. One of the key factors contributing to its appeal is the state's incentive program that provides a ten-year waiver on state, county, and local sales taxes for data centers. This tax incentive significantly reduces the operating costs for data center providers, making Arizona an economically beneficial choice.  

By lowering the financial burden, it encourages investment and fosters growth in the colocation industry. This competitive advantage allows data center providers in Arizona to offer more cost-effective solutions to businesses seeking their services, attracting a wide range of organizations looking to optimize their IT infrastructure while minimizing expenses. 

This tax incentive, coupled with a business-friendly environment and supportive legislation, encourages investment and innovation in the colocation sector. 

Strategic Geographic Location 

Arizona's strategic geographic location further enhances its appeal as a prime location for data center providers. Situated in the southwestern United States, Arizona enjoys proximity to major markets such as Los Angeles, Las Vegas, and Dallas. This advantageous position positions Arizona as a hub for interconnectivity and data exchange.  

Arizona is close to many big cities. Companies that build data centers there can work with businesses in more than one area at the same time. This helps them talk and share information quickly, without delays. This accessibility to key markets not only enhances connectivity but also opens up opportunities for collaboration and business growth. It cements Arizona's position as an ideal location for data center providers looking to establish a strong presence in the southwestern United States. 

This advantage allows businesses to establish a presence in close proximity to their target audience while minimizing latency and ensuring seamless data transfer. 

Robust Infrastructure and Connectivity 

Phoenix boasts a robust infrastructure, including a reliable power grid, advanced fiber optic networks, and high-speed internet connectivity. The region's utility rates are competitive, ensuring cost-effective operations for data center providers.  

The desert climate in Arizona provides natural cooling advantages, which is a significant benefit for data center operations. The dry and arid conditions in the region allow for lower ambient temperatures compared to more humid areas. The natural temperature of a place can be cooler than usual. This means that you don't need to use air conditioning as much, which uses less energy and makes things work better. 

Data centers in Arizona have a better climate than other places. They can use special cooling methods, such as evaporative cooling or using air from outside to cool down the data center. The reduced energy requirements not only contribute to cost savings but also align with sustainability goals, making Arizona an environmentally-friendly choice for data center providers. 

Expanding Data Center Ecosystem 

The Phoenix area has more than 90 data centers. It is one of the biggest data center markets in the United States. Companies like Digital Realty Trust, DataBank, CyrusOne, and Cyxtera Technologies have put their offices in Phoenix. This growing data center ecosystem provides businesses with a wide range of options to choose from when selecting colocation solutions that best meet their requirements. 

Get Connected 

The colocation market in Arizona, especially Phoenix, is growing a lot. It is becoming more and more popular for data centers and businesses that need colocation solutions. 

Arizona is a great place for businesses to set up shop. There are many benefits, like good business opportunities, a convenient location, strong infrastructure and a lot of data centers. All these things make Arizona an attractive option for companies looking to have reliable and efficient services. 

As the demand for data center services continues to rise, Arizona's colocation market is poised for continued success and innovation. Connect with the experts at Datacenters.com, configure your own customized colocation solution or browse our extensive portfolio of solution providers.