Data Centers Are Leaving the Big Cities. Should You Follow?


What springs to mind when you think about technology? More often than not, it’s crowded big cities—the likes of New York or San Francisco. You can’t really picture a tech hub nestled in an idyllic rural setting, can you?

It’s OK, you don’t have to. Data centers are coming to rural America, so you’ll be able to see this picture in real-life.

Data Centers and the Big City—Yesterday’s Match Made in Heaven

At the dawn of the internet, there was no better place for data centers than the sprawling big city. You need to be where your customers are—and that was big cities. 

In order to achieve low latency, you need to be as close to the user as possible. In the end, it’s basic physics: information travels along fiber optic cables, and it can’t move faster than the speed of light. So the distance between the data center and the user has an undeniable impact on latency. 

For some industries (like fintech, for instance), milliseconds can make million-dollar differences. Today’s financial companies use high-frequency trading algorithms, and speed is essential for them.

Moreover, the uptick in internet of things (IoT) adoption also requires low latency solutions. Machine-to-machine communication thrives on it.

So why doesn’t it always make sense to keep your data in big-city data centers anymore?

Data Centers Leaving Big Cities

Data centers are being built around the country, outside of big cities. In fact, Iowa has become a preferred data center locale for Meta, Microsoft, and other big players. As always, there are several reasons for any major shift: one of them is tied to financial aspects, and the other to demand.

Let’s explore them both.

Rural Data Centers Are More Cost-Effective

Operating a data center in New York, Chicago, or LA gets costly very fast. You’ve got two major things that drain your budget: staff and real estate—both of them come at a premium in densely-populated areas.

In rural areas, aside from more affordable real estate and salaries, you can also benefit from various state or federal incentives designed to improve the local economy. It’s a great deal for data center companies, but also for those using them. When the parent company has lower costs, it can afford to offer its services at lower fees. Our data center near Cedar Falls does just that.

More importantly, though:

Companies Need Regional Data Centers

Most Midwestern businesses think about Minneapolis, Chicago, or Kansas City as the only options for data centers. But that’s no longer true.

Regional data centers like HTDC can help you get your data closer to end-users outside of metro areas and closer to the edge. This is an important benefit for companies of all sizes: no matter of how many users you serve, digital content gets delivered faster with edge computing

Plus, big (city) data centers are usually too expensive for smaller, regional companies. So they are left to choose between on-premise storage and cloud storage. But cloud storage can be more costly than you initially bargained for. And it comes with a hidden but steep fee: latency. 

On the other hand, on-premise storage can get very expensive very fast, especially if it’s not your core competency. So you don’t want to drive five hours to retrieve your data from a Chicago data center and you don’t want the cloud option either.

What’s left?

Colocation—An Added Benefit of Regional Data Centers

Colocation brings the best of both worlds for regional businesses: you don’t have to store your data hours away from your headquarters. And you also don’t have to hire an entire team of engineers to set up and maintain your on-premise data center.

You can simply rent the exact space you need for your hardware in a data center that’s close by—even less than an hour’s drive. This way, you get low latency without paying a premium, and you get ongoing access to your data no matter what happens. Yes, even in case of a natural disaster that leaves most businesses dataless. 

Are Regional Data Centers Worth it?

Urbanization is still an ongoing process in the U.S. When you look at the statistics, you’re tempted to say that metro area data centers are the only ones that make sense.

But it’s always important to put things in context: urban settings aren’t all large metro areas. And with urbanization being an ongoing process, you can expect to see more rural areas developing into small towns and small towns accelerating towards metropolises. 

Regional data centers make sense, first and foremost, for two categories of business: regional companies that need to be closer to their customer base and large companies that want to better serve a segment of their customer base living in a certain area. For example, we offer Waterloo, Iowa, data center and fiber solutions.

Not sure if a regional data center is the right choice for your business? We know there is no one-size-fits-all when it comes to data storage and we’re happy to help you make this decision. Get in touch with our data storage experts for a free consultation.