Connectivity Drives Boston Data Center Market

Last week we continued a special report series on the Boston data center market. This week, we’ll look at the Boston business environment, including power and connectivity infrastructure, disaster risk, and tax incentives available in the region. 

Tax Incentives and Policy

Boston has no standard data center tax incentive. However, incentives can be granted on a case-to-case basis, with some operators negotiating incentives based off the merits of their data center project. For example, the Markley Group was able to negotiate a 20-year personal property tax exemption for their facility in Lowell.

Power

The energy market in Boston experienced deregulation in 1998, providing Boston residents the ability to choose their power provider. Eversource Energy is the Northeast’s largest power provider, delivering power to over 3.5M users in the Northeast United States. Boston’s power cost for data center users is expensive when compared to other competitive markets. While the rates vary based on location, with higher rates downtown, most colocation providers in the area report a power cost in the 15-20¢/kWh range.

Long-haul lines connect the city to other major markets, such as New York, New Jersey, and Northern Virginia, as well as Philadelphia, Pittsburgh, and Cleveland.

Connectivity

Boston has a highly developed fiber footprint, with a variety of long-haul and metro options. Long- haul lines connect the city to other major markets, such as New York, New Jersey, and Northern Virginia, as well as Philadelphia, Pittsburgh, and Cleveland. Lumen, Sprint, Verizon, Windstream, XO Communications, and Zayo all have long-haul lines connected in Boston. Most metro lines are highly dense downtown, with lines running to other dense suburban areas in Waltham, Needham, and Lexington. Hibernia operates a submarine cable running from Boston to Novia Scotia, Ireland, and the UK.

Disaster/Hazard Risk

Boston keeps a relatively stable climate with a low risk of tornadoes and earthquakes. There is, however, a risk for hurricanes and Nor’easter storms common to the area. Due to the coastal location and presence of such storms, flooding has occurred in areas of Boston. The city can also experience occasional blizzards.

Download the full report, Boston Data Center Market, courtesy of Digital Realty, to learn more about this competitive data center market. In our next article, we’ll look at some key market updates and the city’s rich tech history. Catch up on the previous articles here and here.