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A Phoenix Rises in the Desert as a Data Center Hub 

May 12, 2023

Phoenix has recently enjoyed sensational growth as a data center market, scaling from a sub-200-megawatt size less than ten years ago to a soon-to-be one-gigawatt behemoth, surpassing many traditional primary markets in the process. Success has stemmed from various benefits, including lower-cost land and power to local incentives and helpful utilities. Together these benefits have caused a local ecosystem to spring out of the desert, one that will continue to draw deployments from across the globe. 

In 2013, the state of Arizona passed a package of data center incentives to attract large-scale development; tax exemptions were made available for investments as low as $25 million in rural areas or $50 million in urban environments for terms of ten years for new construction or 20 years for redevelopment. Early adopters noted that land was plentiful in large tracts across the Phoenix metropolitan area, thanks to a lack of natural barriers, such as mountains or large bodies of water. Without the extreme constrictions of many coastal markets, a suburban campus-style environment began to develop, particularly in submarkets such as Mesa, Goodyear, and Tempe. With a low risk of natural disasters in the greater Phoenix area, construction costs have traditionally been lower than in next-door California, with low latency routes to large cities such as Los Angeles, San Diego, or even the Bay Area.  

Hyperscale cloud services have taken to Phoenix quickly, with a mix of large, self-built campuses and large leases to serve local and national requirements. Local utility Salt River Project has extended a warm welcome to all operators. The area has yet to face dire power restrictions that have befallen many other global primary cities. Thanks to the hot desert climate, solar power could play a role in future expansions, whether directly powering buildings during daylight hours or serving to offset operations in-state. While the dry air can lead to an easy source of cooling during evenings, water usage in the desert for daytime cooling will be a concern for dense builds moving forward. As such, Phoenix could serve as a testbed for direct-to-chip or immersion cooling environments, as water usage effectiveness trends toward power usage effectiveness in driving overall operational efficiency. 

Phoenix has the potential to scale to the second-largest market in the country behind perennial leader Northern Virginia thanks to the incentives and lower operating and entry costs on offer. Expect continued growth throughout the next five years as the industry-friendly environment scales to ever-larger campuses and efficient solutions.  

EdgeConneX offers an existing data center in Tempe and an upcoming campus in Mesa. Both offer secure, carrier-neutral environments for all deployments, with excellent access to the Phoenix metropolitan area and beyond.  

  • Tier III design 
  • 100 MW+ in development
  • 10 miles from downtown Phoenix (Tempe location) 
  • Azure ExpressRoute available in Tempe 
  • Engineered for customers requiring the lowest possible latency 

To learn more, download the EdgeConneX Phoenix data sheet HERE.

Schedule a virtual tour: https://www.edgeconnex.com/virtual-tours/

To tour our current or upcoming Phoenix locations, please contact: capacity@edgeconnex.com