Five Reasons why Utah is such a Great Place for Data Center Colocation

Low Power Costs
Utah has some of the nations lowest power costs because of the abundant coal reserves in Utah and Wyoming. Utah's power costs are lower than neighboring Nevada and Arizona and half that of California. If a data center is able to negotiate low power rates with the power utility provider they are able to pass the cost savings on to their customers. In essence, if the service quality is the same in California and in Utah you would find pricing far less for the same service in Utah than in California.

Disaster Safe Geography
Utah is located in an ideal disaster safe zone free of tornadoes, flooding, hurricanes, ice storms and terrorist targets. While earthquakes pose a threat, the risk is minimal due to the pulling apart nature of the fault line as opposed to the fault line that California has which slips and the fault line of India has which collides together pushing the mountains up. 

Great Connectivity
Utah is located on the crossroads of Internet connectivity between the East and West coasts. The fiber paths travel from the East coast to Salt Lake City and then branch out to Seattle, San Francisco and Los Angeles. Because of the proximity to major fiber paths Utah offers a wide selection of large Internet carriers on-net in Utah's data center facilities.

Abundant, Low-cost Tech Talent
Utah is an emerging tech hub, even garnishing the nickname of Silicon Slopes and major offices of Oracle, Adobe and Microsoft. With robust U of U and BYU computer science and entrepreneurial programs fueling the new tech venture growth, there are lots of tech savvy students seeking employment as well as a solid batch of experienced talent to hire. 

Cool Desert Climate
Utah's cool desert climate means low PUE and ultimately lower overhead for providing data center services, allowing the cost savings to be passed on to the customer. Utah's climate almost fits the ASHRAE window for optimal operating temperature and humidity without conditioning the air, which means that for 10 months out of the year the outside air can be used to cool the facility without the added cost of cooling it.

Utah is a Top Place for Site Selection

For tech managers selecting a site to host their data infrastructure there has always been a strong impulse to host those servers and hardware in a facility within three hours’ drive of the company headquarters. Some call it the “Server Hugger” mentality, which makes IT personnel at ease when they are near their hardware. But slowly companies are recognizing that it’s much more cost effective and less risky to host your data infrastructure in a place like Utah than near their headquarters.

The appeal of a place like Utah isn’t obvious unless you look at the numbers. With servers consuming more and more power and with an ever lower tolerance for downtime, Utah’s low cost of power and disaster safe geography make it a straight forward choice.

Commercial Power Comparison by State

State | Cost per Kw/hr (Rank Among All States)

California | $13.73 (#43)
Arizona | $10.08 (#30)
Colorado | $9.93 (#28)
Nevada | $9.44 (#22)
Oregon | $8.92 (#16)
Utah | $8.46 (#8)
Washington | $8.02 (#4)

Source: U.S. Energy Information Administration April 2015 Commercial Power Costs

Presidential Disaster Declarations by State

State | Total Disaster Declarations (Rank Among All States)

California | 236 (#49)
Arizona | 78 (#41)
Colorado | 84 (#43)
Nevada | 76 (#39)
Oregon | 89 (#44)
Utah | 33 (#7)
Washington | 128 (#46)

Source: Federal Emergency Management Agency Disaster Declarations by State/Tribal Government

The low cost of power combined with a disaster safe geography has made Utah the location for much of the world’s archival data. Many data archive companies have a data center footprint in Utah. In 2010 the NSA built a massive data center facility in Utah to support its massive data storage projects.

For companies located out of the state of Utah accessibility is a major site selection criteria. The server hugger mentality is real and high accessibility goes a long way to easing their fears. Fortunately, Utah has a major airport that ranks #1 in on-time arrival and departures and is a major delta hub with frequent non-stop flights.

Airport and On-Time Performance Summary (Rank)

State | On-Time Performance Arrival Summary (Rank)

LAX – Los Angeles International | 78% (#20)
SAN – San Diego International | 79% (#13)
SFO – San Francisco International | 71% (#27)
PHX – Phoenix Sky Harbor International | 81% (#8)
DEN – Denver International | 78% (#16)
LAS – Las Vegas McCarran International | 80% (#10)
PDX – Portland International | 82% (#7)
SLC – Salt Lake City International | 87% (#1)
SEA – Seattle/Tacoma International | 83% (#3)

Source: U.S. Department of Transportation Bureau of Transportation Statistics

It may take a while for managers to get comfortable with their data infrastructure located out of state, but the server hugger mentality will eventually break down. Business disruption due to natural disasters plus the high service costs will force IT managers to consider what matters most, and when they do they’ll choose Utah for data infrastructure site selection.


CA Fiber Attacks Should Be The Last Straw

Recently there were some cut fiber lines in California which appear to be an attack on the fiber connectivity for several providers. Many Internet Carriers were affected, most notably Level 3 Communications, which has the highest reputation for their service delivery network and uptime. 

While California enjoys a glut of tech companies in the Bay Area, it seems ridiculous that they would host their infrastructure there as well. But the server hugger mentality persists, unnecessarily increasing the operational costs of a company's IT Department. Additionally, California has a major fault line running through it, and is prone to major earthquakes.

As if the high cost of power and earthquakes weren't enough to convince you to get of the Coast and inland to Utah, now companies have to deal with downtime due to attacks on fiber lines. This should be the last straw. What else is it going to take for IT Directors and C-Level management to understand that it doesn't make sense to keep your data infrastructure in California?


Fiber lines being cut:

California earthquake threat:

Description of a Server Hugger:

Huge Tech Growth Drives Demand for Utah Colocation

Lehi, Utah is hot bed for tech office space. By the years end there will be about 2.5MM sq. ft. of Class-A office space. Driving the growth is the central proximity to both Salt Lake City and Provo, accessibility with a Front Runner train station and the freeway and the prestige of being located next to some of the hottest tech companies around.

All of these factors bode well for C7 Data Centers, who has data center facilities at the point of the mountain next to Lehi. Companies like to have their hardware in a nearby data center facility, and C7's is the closest you can get to this tech hot bed. 

A trend we're seeing is relocation of  corporate divisions of major tech companies to Lehi. Oracle, Adobe and Microsoft all have office space or even their own buildings there in Lehi. Low cost of living, great outdoor lifestyle and a pool of great tech talent drive the appeal to relocated corporate divisions to Utah. While not tech focused, Goldman Sachs and many other companies have a large presence in Salt Lake City as well.

As the premiere colocation data center provider in Utah, C7 is doing well with their facilities located around hi-tech localities in Utah.


Utah County Office Space numbers:

Tech Office Space Demand in Lehi:

Lehi Economic Development Plan:


Silicon Valley is not a Good Location for Data Center Colocation

Why would anyone in there right mind put their data infrastructure in a place like Silicon Valley? Sure there are lots of businesses there, lots of venture capital and tech talent, but from a disaster and pricing standpoint, Silicon Valley is a terrible place for data center colocation.

The only rationale for putting your infrastructure in Silicon Valley is the server hugger argument - people who just can't stand to have their hardware in a nearby state, in spite of the fact that they'd be saving tons of money and significantly lowering their disaster risk profile. Now a handful of businesses may require proximity for low latency like high frequency trading but that is a very small segment.

Recently an article was published which talked about targeted attacks in Silicon Valley on fiber paths, where people dressed up as construction workers would just go and cut fiber optic lines in targeted places throughout the Bay Area.

So not only do you run the risk of natural disasters such as earthquakes, but now you have man made disasters that can disrupt your service. Add onto that the high cost of power and high cost of living and you have to think that the server hugger mentality is going to cost a company far more than it should in cost and downtime. 

What does the server hugger mentality gain you? 17 milliseconds. That's the latency between Salt Lake City and Silicon Valley. 


Fiber lines being cut in Silicon Valley:

Server Hugger Mentality:

Disaster Declarations by State:

Industrial Power Rates by State:

17 Millisecond Latency between Utah and Silicon Valley:


Utah's Beautiful Outdoors Makes Colocation More Enjoyable

Some people may like the concrete jungle, but when you've spent the day in a data center facility there isn't anything like a beautiful mountain hike to clear the mind.

While Utah is known for it disaster safe geography and low cost power rates to colocation customers, it also boasts world class summer and winter outdoor activities. 

Home to 7 world class ski resorts along with the facilities from the 2002 winter olympic games, Utah is a dream come true for skiers, snowboarders and snow enthusiasts. Then in the summer time these ski resorts convert to incredible mountain biking and hiking venues where they lift you up on their tram and let you bike or hike down and take in the beautiful vistas.

Down south in central and southern Utah are 5 national parks with amazing red rock features, trails and recreational opportunities for rock climbers, boating and water skiers. Most outdoors guidebooks list southern Utah as a top 10 outdoor destination in the world. 

Most data center customers don't realize that colocation in Utah has so many outdoor perks until they visit the state and feel the adventure build up inside of them. 

With so many outdoor opportunities, Utah is truly a great place to enjoy life when you're not in the server room.

Beautiful mountain trails near data center facilities:

World class ski resorts near Salt Lake City metro area:

Top national parks in Utah:

Ten most scenic national parks:

Utah Economy Booming, Driving Data Center Colocation

Utah grew it's economy by over 3% in 2014, far more than the national 1.8% average and good enough for third place among all US states. Unemployment rates are low at 3.6%, fourth best in the US and job creation rates are high at 3.38% for third best in the US. 

What do all of these numbers mean for data center colocation in Utah? It's a hot market. Businesses are growing at an aggressive pace and with business growth comes data infrastructure growth: new projects, scaling up applications, new customers and services. Business growth and data infrastructure growth go hand in hand. 

Fortunately, Utah boasts some of the nations best environments for data center colocation with its disaster safe geography, low power rates for those energy intensive servers and a moderate cool-desert climate. Certainly Utah's data center market for multi-tenant colocation will be strong in 2015 and beyond. 


Utah Economic Outlook

Data for Utah's Low Unemployment Rate

Data for Utah's Job Creation Rate

Data for Low National Power Costs

Data for Low Disaster Risk Assertion


Data Centers in the Utah Market

Viawest has 7 data center facilities in the Utah / Salt Lake City metro area, making it the largest data center provider in Utah by number of facilities, but are they biggest in the state by sq. ft. of data center floor space?

Tonaquint Data Centers, Viawest, C7 Data Centers, Voonami, Ace Data Centers, xMission, Fibernet and Level 3 all have data center facilities in Utah.  Here is the breakdown of facilities and space:

C7 Data Centers
City Creek: 10,500 sq. ft.
Granite Point 1: 50,000 sq. ft.
Granite Point 2: 50,000 sq. ft.
Timpanogos: 10,000 sq. ft.

Lindon: 6,336 sq. ft.
Cottonwood: 6,811 sq. ft.
200 E: 14,713 sq. ft.
Campus View: 18,991 sq. ft.
Presidents: 7,613 sq. ft.
Delong: 33,386 sq.ft.
West: 12,512 sq. ft.

17,000 sq. ft.

Level 3
10,370 sq. ft 

10,000 sq. ft.

Ace Data Centers
8,500 sq. ft.

5,000 sq. ft.


So for total data center floor space, here's how the utah data center facilities rank:

  1.  C7 Data Center at 120,500 sq. ft. of raised floor space
  2. Viawest at 100,362 sq. ft. of raised floor space
  3. Tonaquint at 17,000 sq. ft.
  4. Level 3 at 10,370 sq. ft. *
  5. XMission at 10,000 sq. ft.
  6. Fibernet at 10,000 sq. ft.
  7. Ace Data Centers at 8,500 sq. ft.
  8. Voonami at 5,000 sq. ft.

Looks like Viawest, while having the most facilities in Utah, falls to second place behind C7 for total data center floor space in Utah. At a distant third is Tonaquint and then Level 3, XMission, Fibernet and Ace Data Centers. Voonami gets the award for showing up, albeit in last place. Level 3 was tough to place because they only show data for one facility while they have three in Utah.


Data Center Map -
Contacting the data centers directly (XMission, C7)
Looking at the information on their websites (Viawest, Tonaquint, Ace Data Centers)
Guessing on the facility size because it's too small for them to want to list it (Fibernet, Voonami).

Components of a Multi-tenant Colocation Data Center

There are several parts that make up a successful colocation data center, here are the five essential components:

Power is the most critical component of a data center facility, it's what powers the servers and data infrastructure. Typically power comes from a sub-station via two separate legs of power, is scrubbed to remove brownouts and is stepped down to 220V and 110V.  Sometimes data centers will provide power straight from the power grid, which is much less reliable but quite inexpensive and suitable for data infrastructure housing archival and other types of low access data.

Data center providers have network carriers on-net and available for customers to negotiate with for bandwidth and connectivity solutions. Some data centers provide a blended BGP solution that combines on-net carriers for a fastest path bandwidth solution for customer. Additionally, colocation data center providers with more than one facility will likely have a network backbone that you can leverage for low latency failover from a primary site to a secondary site in another of their facilities.

All of the power that goes into the facility is converted to heat. That's a lot of heat to remove, and it's critical you remove it so that hardware operates at optimal temperature and humidity, otherwise equipment will fail and fires can occur. Some data center providers are able to bring in filtered air from the outside to cool the hardware efficiently, others have to cool the air before it gets sent to the hardware. 

Security and Compliance
Data centers operate under closely monitored control procedures to ensure compliance with PCI, HIPAA and SSAE 16 requirements for data centers. All of these certifications are audited annually and consistently reviewed.

While the infrastructure and facility may be setup correctly it takes expert support and staff to operate it efficiently and effectively and without human error so as to preserve uptime. Data center facilities often promote from within those who show aptitude and discipline in providing expert support and customer service. 

Utah Bitcoin Colocation

Much has been said about currency mining but one observation that seems overlooked is how data center providers are now mining when it has become cost prohibitive for most to mine. 

Data centers have several advantages against traditional currency miners:

  • The massive quantities of power already under contract with the power companies allows for data center providers to mine off-peak times at a substantially lower rate than typical currency miners
  • Some currency miners business plans only worked when the price of bitcoin was over a certain dollar value. As the price decreased over 2014, mining became unprofitable and data center bills went unpaid. Some companies who couldn't pay their data center provider the contracted monthly charges soon were found in breach of contract and found their hardware in the ownership of the data center provider. However, since data centers have a lower break-even point for mining the defaulted customer hardware that was now in their possession is once again online and mining. 
  • Traditional currency miners don't have the cooling and power infrastructure in place to mine without burning up their equipment. Data center providers already have that infrastructure built out and can leverage it.

Since Utah has some of the best power pricing in the nation there are a lot of bitcoin miners in Utah. And if the miners didn't have the foresight to project what would happen if the price dropped they may have breached their contract. I would guess that several data center providers in Utah are now, or shortly will be in possession of bitcoin hardware, mining away.


Bitcoin Price Index

Bitcoin Miner Defaults

Bitcoin Mining Profit Calculator


Why Companies Choose Utah For Data Backup and Data Storage

There are several reasons why companies choose Utah for data backup and data storage. Here are few to consider:

  1. Utah has cheap power. With power being the primary cost of a data center, the lower the cost of power the more aggressive pricing a data center company can offer. 
  2. Utah is disaster safe. You don't hear of tornadoes, hurricanes, earthquakes and severe weather happening in Utah. Your data needs to be kept in a safe place free from natural disasters and Utah is located in a disaster safe region. 
  3. Utah has great connectivity options. When you need to access your data you don't want it to take a long time to download it. Fortunately Utah is located on the crossroads of Internet connectivity reaching the West coast and there are a lot of carriers to choose from.

With the importance of keeping costs low, reducing your disaster risk profile and being able to move vast amounts of data, Utah is a solid choice for data backup and data storage. In fact, many of the top data backup companies host their backup data infrastructure in Utah.


Industrial Power Price Comparison

Presidential Disaster Declarations by State

Internet Carrier Connectivity Maps

Utah conducts state-wide earthquake drill

Utah is known as a place void of most all the natural disasters that seem to plague other parts of the US.  You never hear of earthquakes, hurricanes, flooding, tornadoes, fires or severe storms happening in Utah, yet those have caused so many outages in other parts of the country.

Of all the potential natural disasters, only earthquakes seem to pose any real upcoming threat to data center colocation. Utah has beautiful mountains which soar into the sky, creating a heaven for skiers and hikers alike. These mountains were obviously formed by earthquakes, and while a big earthquake hasn't happened in quite some time, the potential exists.

Just recently, Utah school students participated in a statewide earthquake drill as part of an initiative to help people and organizations practice how to protect themselves in the event of a major earthquake. 

"A 7.0 magnitude earthquake in the Salt Lake segment of the Wasatch fault is considered the worst natural disaster that could happen in the region" said Joe Dougherty, spokesman for the Utah Division of Emergency Management. 

Fortunately, the geography is such that when an earthquake occurs in Utah, the plates move away from each other.  Whereas in India the plates move towards each other forming the Himalaya Mountains, and with the San Andreas Fault which causes so many earthquakes in California, the plates move sliding against each other. 

However, the odds of a 7.0 earthquake happening in Utah are quite low, with the largest earthquake happening in the last 40 years being a 5.6 magnitude.

With the geology of the region being one where the earthquake isn't the type of one that would cause a lot of destruction, and because of the disaster free nature of the region in general, Utah is still a great place for data center colocation.

The Great Utah ShakeOut: Readying Utahns for a 7.0 quake

Recent Earthquakes in the Intermountain West

Ground-shaking Map for a 7.0 Earthquake on the Wasatch Fault

Biggest Earthquakes Near Utah

What does California's Drought have to do with Utah Colocation?

It's just starting to really warm up and we're already seeing all over the news that California has reached critically low water levels, extending a four year drought. So then, what does this drought have to do with Utah colocation?

One of the most highly efficient power generation methods are hydroelectric dams. Water moves downstream and the momentum builds up behind a dam and is funneled through, turning a generator as it goes. There's no extraction, there's no burning, you don't have to wait for the wind to pick up - hydropower is an energy source with tremendous efficiency and continuous production ability.

Now with the drought, California is having to use natural gas instead of hydroelectric power to compensate for the lack of hydroelectric energy produced. Natural gas has to be extracted and burned to generate electricity. Energy produced by natural gas is more expensive to make than energy produced by hydroelectric power. So naturally, the average cost of power in California is going to rise. 

The good thing is that nearby Utah has power costs that are half that of California. Power is the main fixed cost for a data center. So the cheaper the power cost, the lower the hosting costs are going to be. With the drought, the value of Utah colocation just soars. Makes sense that data center customers in California would be even more motivated to move their infrastructure to Utah.

Idea for story:
California Drought, Natural Gas:
Power efficiency comparisons:
Power costs by state comparisons: