• About Us
  • Partnership Opportunities
  • Privacy Policy

Data Center Frontier

Charting the future of data centers and cloud computing.

  • Cloud
    • Hyperscale
  • Colo
    • Site Selection
    • Interconnection
  • Energy
    • Sustainability
  • Cooling
  • Technology
    • Internet of Things
    • AI & Machine Learning
    • Edge Computing
    • Virtual Reality
    • Autonomous Cars
    • 5G Wireless
    • Satellites
  • Design
    • Servers
    • Storage
    • Network
  • Voices
  • Podcast
  • White Papers
  • Resources
    • COVID-19
    • Events
    • Newsletter
    • Companies
    • Data Center 101
  • Jobs
You are here: Home / Special Reports / Phoenix Offers Data Center Friendly Business Environment

Phoenix Offers Data Center Friendly Business Environment

By Rich Miller - May 13, 2021

Phoenix Offers Data Center Friendly Business Environment

The Compass Datacenters campus in Goodyear, Arizona. (Photo: Compass Datacenters)

LinkedinTwitterFacebookSubscribe
Mail

Last week in our special report series on the Phoenix data center market, we looked at how major data center players are expanding to the Phoenix suburbs of Goodyear and Mesa. This week, we’ll take a deeper look at the business environment that’s helping Phoenix to become a destination for providers from other markets—particularly California—who are seeking to place data center assets in a location with low disaster risk, either for primary or backup data centers.

Phoenix Data Center Market

Download the full report.

ECONOMIC DEVELOPMENT AND INCENTIVES

n a boost for the data center market in Phoenix, Gov. Doug Ducey has signed legislation that reauthorizes and strengthens Arizona’s tax incentive package for data centers, extending tax breaks through 2033. The update to the incentives provides extended visibility into the cost of operating data centers in the state, which is crucial factor for companies considering Phoenix versus other markets in a site selection process.

Arizona first enacted data center incentives in 2013 to increase its competitiveness in attracting data center investment and expansion. Since then, at least 20 other states have implemented new incentives or sweetened existing ones, with at least 34 state now offering tax breaks to attract new data center projects.

The new legislation, known as HB2649, takes several steps to position Arizona for future data center growth:

  • The bill extends Arizona’s tax incentives for an additional 10 years, through 2033.
  • It clarifies the equipment that qualifies for incentives on installation or maintenance, addressing confusion around this issue among contractors which led some to collect and remit the tax.
  • Allows an applicant to set an effective date of up to five years from date of filing, so the timing of incentive benefit more closely track the opening and operations of a facility.

The Arizona data center industry organized to seek an extension of the incentives, noting that some large customers require clarity on their costs beyond 2023, the scheduled sunset of the existing package.

CONNECTIVITY

Phoenix has good fiber infrastructure. CenturyLink, Electric Lightwave/Integra, Level 3, Sprint, XO, and Zayo all run long-haul fiber connections through Phoenix. Carriers such as ICFN, Syringa, Tru Com, and Windstream have developed locally-focused fiber networks. Municipal fiber is also available in Mesa, AZ to serve the area’s data centers.

POWER

Power costs in Arizona are well below the national average. Similar to the Los Angeles market, Phoenix is served by a public utility provider of power and water, the Salt River Project (SRP). An integrated utility, SRP provides electric generation, transmission, and distribution services in the Phoenix metro area. A privately-owned competing electric provider, Arizona Public Service (APS), serves most of the Phoenix market where data centers are clustered. Both SRP and APS offer a diverse fuel mix that includes renewable sources such as hydroelectric and solar. Phoenix’s plentiful sunshine is a double-edged sword for the data center industry: It offers an almost year-round source of “green” energy (driving public and private investments in solar power infrastructure construction, largely to accommodate a major Apple manufacturing facility in the area) but also requires more electricity to cool data centers during the area’s numerous days of over 100-degree Fahrenheit temperatures.

In an effort to lure data centers to the Phoenix market, Arizona offers a ten-year wavier on state, county, and local sales taxes on both equipment purchases and labor services for data centers.

HAZARD RISK OVERVIEW

According to the special report, Phoenix is rated as a low risk for all types of natural disasters. Hurricane damage is non-existent, floods are uncommon, and there are no major fault lines to cause seismic events in the Phoenix market.

Download the full report, 2021 Data Center Market Overview Phoenix, courtesy of NTT, to learn more about the Phoenix market. 

LinkedinTwitterFacebookSubscribe
Mail

Tagged With: Data Center Frontier Special Report, Data Center locations, NTT, Phoenix

Newsletters

Stay informed: Get our weekly updates!

Are you a new reader? Follow Data Center Frontier on Twitter or Facebook.

About Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter

Voices of the Industry

Building an Enduring World Begins with Accountability and Defining an Approach for Long-term Success

Building an Enduring World Begins with Accountability and Defining an Approach for Long-term Success TJ Faze, Head of ESG Strategy and Engagement at Vertiv, outlines the company's learnings around its recent ESG efforts.

White Papers

data center provider

How to Choose a Data Center Provider

Asking the right questions is a big part of the equation. Here are eight considerations in a new white paper from Iron Mountain with targeted questions to ask that will help you choose the right colocation partner for your business. 

Get this PDF emailed to you.

We always respect your privacy and we never sell or rent our list to third parties. By downloading this White Paper you are agreeing to our terms of service. You can opt out at any time.

DCF Spotlight

Data center modules on display at the recent Edge Congress conference in Austin, Texas. (Photo: Rich Miller)

Edge Computing is Poised to Remake the Data Center Landscape

Data center leaders are investing in edge computing and edge solutions and actively looking at new ways to deploy edge capacity to support evolving business and user requirements.

An aerial view of major facilities in Data Center Alley in Ashburn, Virginia. (Image: Loudoun County)

Northern Virginia Data Center Market: The Focal Point for Cloud Growth

The Northern Virginia data center market is seeing a surge in supply and an even bigger surge in demand. Data Center Frontier explores trends, stats and future expectations for the No. 1 data center market in the country.

See More Spotlight Features

Newsletters

Get the Latest News from Data Center Frontier

Job Listings

RSS Job Openings | Pkaza Critical Facilities Recruiting

  • MEP Coordinator - Data Center Construction - Ashburn, VA
  • Data Center Facility Engineer - Chantilly, VA
  • Data Center Site Operations VP - Seattle, WA
  • Senior Electrical Engineer - Data Center - Denver, CO
  • Senior Estimator - Data Center Construction - Denver, CO

See More Jobs

Data Center 101

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center Frontier, in partnership with Open Spectrum, brings our readers a series that provides an introductory guidebook to the ins and outs of the data center and colocation industry. Think power systems, cooling, solutions, data center contracts and more. The Data Center 101 Special Report series is directed to those new to the industry, or those of our readers who need to brush up on the basics.

  • Data Center Power
  • Data Center Cooling
  • Strategies for Data Center Location
  • Data Center Pricing Negotiating
  • Cloud Computing

See More Data center 101 Topics

About Us

Charting the future of data centers and cloud computing. We write about what’s next for the Internet, and the innovations that will take us there. We tell the story of the digital economy through the data center facilities that power cloud computing and the people who build them. Read more ...
  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

About Our Founder

Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution. Meet the DCF team.

TOPICS

  • 5G Wireless
  • Cloud
  • Colo
  • Connected Cars
  • Cooling
  • Cornerstone
  • Coronavirus
  • Design
  • Edge Computing
  • Energy
  • Executive Roundtable
  • Featured
  • Finance
  • Hyperscale
  • Interconnection
  • Internet of Things
  • Machine Learning
  • Network
  • Podcast
  • Servers
  • Site Selection
  • Social Business
  • Special Reports
  • Storage
  • Sustainability
  • Videos
  • Virtual Reality
  • Voices of the Industry
  • Webinar
  • White Paper

Copyright Endeavor Business Media© 2022