We always say that price should never be a concern when you’re choosing an off-site data center for your business. Your data, after all, is your most valuable asset.
Of course, the price is always a concern. The key is making sure you are getting the absolute most value, security, scalability, and access to your data for what you are paying.
When looking at potential sites and providers, keep in mind that there are a number of factors that drive up the price of a data center, while simultaneously subtracting value.
1. Tax Incentives
The location of your data center will impact your price in a number of ways we will explore. The first one is the number of tax incentives or credits that the data center’s home state has to offer.
This is one of the reasons Virginia is particularly attractive, and you can click here to find out more about Ashburn’s Data Center Alley.
Virginia offers a data center retail sales and uses tax exemption (DCRSUT Exemption) to a would-be data center or business if they:
– Provide a $150 million new capital investment.
– Create 50 new jobs with the operation or maintenance of the data center
– Ensure that all new jobs are paid at least 150% of the prevailing annual average wage in the locality where it is located, excluding fringe benefits.
As you can see, it pays to build your data center in Virginia. It also pays to work at one. These high wages also reduce turnover and ensure you always have an experienced and tenured employee looking after your data.
We’re not just speaking about the actual facility’s internal infrastructure, which is obviously important. How well built up is the area and community where this data center sits?
You need to ensure they have world-class fiber infrastructure. However, you also need to look at the big picture things. How are the road and highway structure around the center? Is it easily accessible by emergency vehicles if there is a fire or some other crisis?
How reliable is the power grid? How reliant will this center be on backup power throughout the year? Backup power and redundancy are good, but a reliable grid that is always up is better.
Also, how expensive is that power? Electricity can literally double in price from state to state. How much will this data center have to pay for the absolutely massive amount of power they are going to need? For example, in May 2019, the commercial rate in Connecticut was 17.21 cents per kilowatt-hour, compared to 8.29 in Virginia.
This is why location is always an important factor in choosing your data center. If the state that you’re looking at doesn’t offer tax incentives or low energy costs, you’re probably going to be paying too much to house your data there.
At the same time, a low-cost data center in an area with an unreliable infrastructure is going to cost you more in the long run with downtime and data breaches.
There is no such thing as paying too much. But, you can pay too much for too little value.