Because of its location, connectivity, stable weather and geography, Arizona is an ideal state to house your computer data center. Its utilities provide reliable, low-cost energy, while the fiber connections in and through the state are robust. Many talented technology employees call Arizona’s urban communities home, and greenfield development space is available in urban, suburban and rural areas.
Arizona’s data centers enjoy competitive advantages and a business-friendly tax climate which includes low corporate income taxes, additional depreciation for property tax purposes and a data center transaction privilege tax (sales tax) exemption.
Read more about our Computer Data Program, which encourages computer data center (CDC) operation and expansion in Arizona.
ARIZONA IS HOME TO MORE THAN 50 MAJOR DATA CENTERS.
RESEARCH & UTILITIES
Research for fiber optics’ new technology takes place in Tucson, known as Optics Valley. Some of America’s largest fiber optic network paths go directly through Tucson and Phoenix, providing a strong connection to the world along with the advantage of proximity to futuristic technologies under development.
Statewide, average electricity costs are modest, particularly compared with those in nearby California. Arizona’s average cost for industrial electricity in 2015 was 6.26 cents/kWh, compared with California’s 12.33 cents/kWh. Electricity rates offered by Arizona utilities vary, but often Arizona utilities offer competitive incentive rates for industrial and other high-volume users.
DATA CENTERS IN ARIZONA
The data center industry (identified as NAICS 5182, data processing, hosting, and related services) is a high-performance industry in Arizona.
- Arizona is home to an estimated 363 data processing, hosting and related service establishments employing approximately 9,260 people.
- The data processing, hosting and related services industry pays an average annual wage of $78,113 in Arizona. Nationally, the average wage in this industry amounts to $94,537.
- Employment in data processing, hosting and related services increased by 115 percent from 2010 to 2015 in Arizona, making this a high-performance industry in the state with respect to job growth.
- Arizona is among the top 20 states for employment in data processing, hosting and related services (Arizona ranks 11th).
- Among the top 20 states for data center employment, Arizona ranks first for job growth in terms of percentage change, and third for total jobs added during the 2010 to 2015 time period.
- Arizona has the third highest location quotient (LQ) among this group of 20 states, indicating a high labor concentration in this industry.
SUCCESS STORIES
Examples of major colocation data centers include:
- CyrusOne, which boasts nearly 110MW of power through an onsite substation. At full build-out, this facility will be the largest of its kind.
- Digital Realty, one of the largest operators of co-location data centers in Arizona. DR collectively has more than 1.2 million square feet of data center properties spread over seven centers.
- IO Data Centers in Phoenix and Scottsdale. At 538,000 square feet, IO Phoenix is the largest commercially available data center in the United States to achieve Tier III Design Certification from the Uptime Institute.
- Notably, IO Data Centers manufactures its IO.Anywhere modular data centers in Arizona. The modules allow its user to flexibly deliver standard and secure increments of power, cooling, and IT capacity on a just-in-time basis.
Major enterprise data centers in Arizona include:
- American Express in Northwest Phoenix, which houses approximately 1,600 employees. This data center is built below grade level of AE’s Technology Resource Center West.
- EBay/Paypal, which operates one of the world’s most efficient data centers, able to use 76-95% of total power towards computers (vs. a U.S. average of 57%). In Arizona; PayPal has approximately 1,500 employees in the Greater Phoenix region.
- Edward Jones has operated a corporate data center in Arizona since 2000, which has resulted in the relocation of the company’s national training center and regional headquarters to Greater Phoenix.
- GoDaddy, which has various state-of-the-art data centers across Greater Phoenix and in 2013 broke ground for its newest facility, which will house a data center and approximately 1,300 employees located in Tempe. Arizona centers boast a DWDM Ethernet Backbone that operates at 20 gigabits per second.
Tax Relief
- Computer Data Center Program
- Quality Jobs Tax Credit Program
- Commercial/Industrial Solar Energy Tax Credit Program
- Additional Depreciation
- Sales Tax Exemption for Machinery/Equipment/Transmission Lines used directly in producing or transmitting electrical power, but not including distribution
FINANCIAL SERVICES & BUSINESS
Arizona’s business environment is thriving, with major companies like Wells Fargo, Chase, State Farm, Union Bank, and Silicon Valley Bank all announcing major expansions in 2013 and 2014. Approximately 608,000 direct jobs at more than 45,000 establishments were in the Financial Activities and Professional & Business Services industries during 2015, according to the Bureau of Labor Statistics.
Business schools within the state are consistently ranked among America’s top ten, offering leading programs in areas such as Entrepreneurship, Supply Chain Management, Management Information Systems, and Information Technology. The graduates of these schools are leading the way into the future of the services industry -- integrating technology and finding new ways to expand a company’s promotional ability.