Data Centers in Arizona

Arizona – Premier US Disaster Recovery Hub

Executive Summary

Arizona is the market of choice for companies seeking a stable, scalable, and cost-effective alternative to California. Its robust infrastructure and favorable business climate make it a top-tier location for disaster recovery sites and primary production workloads, protecting revenue by ensuring high availability and low latency to the entire Southwestern United States.

Arizona: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: The market features nearly 50 unique network providers as of September 2025. Carrier-neutral facilities in Phoenix, Chandler, and other hubs provide extensive choice for transit, transport, and private connectivity.

Direct Cloud On-Ramps: With over 8 cloud on-ramps connecting to 13 distinct regions as of September 2025, Arizona offers direct, low-latency links to major platforms. Providers with a physical presence include AWS, Microsoft Azure, and Oracle Cloud.

Internet Exchange Points (IXPs): The primary public peering point is the Phoenix-IX. This exchange facilitates efficient, low-cost traffic exchange between networks, reducing latency for users across the Mountain West region.

Bare Metal: Bare metal server solutions are widely available from multiple providers. This allows businesses to deploy dedicated compute without the overhead of managing their own hardware, with phoenixNAP being a prominent local option.

Power Analysis

Average Cost Of Power: Industrial power rates typically range from $0.07 to $0.09/kWh as of September 2025. This competitive and stable pricing provides predictable operational costs, a critical advantage for financial modeling of large-scale deployments. The state's power mix includes significant contributions from natural gas (45%), nuclear (27%), and solar (13%).

Power Grid Reliability: The electrical grid, particularly in the Phoenix metro area, is well-engineered to handle extreme summer heat and high demand. Major data center clusters are supported by redundant substations and resilient distribution paths, ensuring high levels of uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are strategically located near business hubs in Phoenix, Chandler, and Mesa. This proximity provides low-latency connectivity for the region's thriving semiconductor, aerospace, healthcare, and financial services industries.

Regional Market Reach: Arizona serves as a critical connectivity hub for the Southwestern US. It offers excellent latency to major markets like Los Angeles, San Diego, Las Vegas, Denver, and Salt Lake City, reaching tens of millions of end-users.

Tax Advantage For Data Centers: Arizona offers aggressive, data-center-specific tax incentives. The state's Computer Data Center Program provides significant sales and use tax exemptions on equipment purchases for both data center owners and their colocation tenants. This directly lowers the total cost of ownership and accelerates the return on investment for any new deployment.

Natural Disaster Risk

Arizona has a High natural disaster risk profile, with a FEMA National Risk Index score of 91.66 as of September 2025. The state is a popular disaster recovery location because it is free of significant hurricane and coastal flooding risks that affect other major markets.

The primary environmental risks to consider are:

• Drought
• Heat Wave
• Riverine Flooding
• Wildfire
• Earthquake
• Landslide