As data consumption and technology usage grow, the need for data centers to store and manage information increases at an unprecedented rate. Today, Americans utilize technology, smart phones, and the internet for everything from booking doctor’s appointments to shopping for groceries. The more data used, the bigger the need for a place to protect and store information. Phoenix is one of the top ten Tier 1 Data Center Markets in the United States, according to Colliers International. Tier 1 Data Center Markets are areas, such as Phoenix and Dallas, that house a large percentage of the nation’s data centers, and are able to provide what they need for further growth. Phoenix, alongside areas like San Francisco/Silicon Valley, Dallas/Fort Worth, and Los Angeles, is poised to take advantage of the growth in data usage through the development of new data center markets. But what makes Phoenix one of the top ten data center markets, and how can the city maintain its position? While a number of elements are crucial to the health of a data center market, access to power, work force, and a positive tax environment are three of the most crucial aspects for a data center’s success.
Data Centers are base load users of energy, meaning that they use the same amount of energy 24 hours a day, seven days a week, 365 days a year. Without a reliable supply of energy, it is nearly impossible for a data center to operate. Arizona’s low chance of environmental disasters, such as tornadoes or earthquakes, that disrupt power delivery and redundant power supplies, through utilities like Salt River Project and Arizona Public Service, allow Phoenix data centers to enjoy a relatively reliable energy supply.
2. Work Force
Between 2012 and 2014, Phoenix tied with San Francisco as the nation’s fastest growing technology market, with a growth of 42.7%, according to the U.S. Bureau of Labor Statistics. With several universities located in or near the Phoenix metropolitan area, the city is well-equipped to educate young professionals in the emerging marketplace. Many graduates from Arizona’s universities and colleges stay in the state; A recent study by the Arizona Republic reported that 420,000 alumni from Arizona universities and colleges are still in the state. . With enrollment in Arizona’s universities growing each year, the state is well-equipped to train the necessary workforce required to grow and sustain a successful technology market.
The third key factor in developing a strong data center environment is establishing a positive tax environment. The passage of a tax exemption for equipment purchased by qualifying data centers, and the recent finalization of the rules related to applying for the exemption, were key factors in securing Arizona’s position as a Tier 1 Market. B3 Strategies helped educate stakeholders and lobby for the passage of the tax exemption in 2014. For more information on the tax exemption and application process, please visit “The Number One Way to Save Over $2 Million on an Arizona Data Center.”
B3 Strategies represents the Arizona Data Center Coalition and supports continued development in Arizona’s data center market. The rise of big data creates new opportunities for growth in the data center space. As a Tier 1 market, Arizona continues to grow and develop its data center and technology industry; however, in order to remain competitive, the state must maintain its tax exemption and support for the industry. B3 Strategies looks forward to continuing to work with Arizona’s data centers to create partnerships and identify new ways to help serve Arizona.
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