Data Centers in Phoenix

Phoenix – Premier Disaster Recovery & West Coast Hub

Phoenix is a primary North American data center market, engineered for high availability and low-latency connectivity to the Western United States. It is an excellent choice for enterprises requiring a stable, scalable infrastructure platform away from the higher seismic risks and operating costs of California.

Phoenix: At A Glance

Network & Connectivity Ecosystem

Phoenix provides a sturdy and well-connected environment for digital infrastructure, serving as a critical hub for traffic between the West Coast, Midwest, and Mexico.

Carrier Density & Carrier Neutrality: Phoenix supports a dense ecosystem with nearly 50 unique network service providers as of September 2025. The market is defined by its numerous carrier-neutral facilities, offering extensive choice and competitive pricing for transit and transport.

Direct Cloud On-Ramps: With over 8 cloud on-ramps and access to 13 distinct cloud regions as of September 2025, Phoenix offers excellent private connectivity to major platforms. Direct access is available for AWS, Microsoft Azure, and Oracle Cloud, enabling secure, high-performance hybrid cloud architectures.

Internet Exchange Points (IXPs): The primary public peering point is DE-CIX Phoenix. This IXP facilitates efficient, low-latency traffic exchange between networks, reducing reliance on more expensive transit routes and improving application performance for regional end-users.

Bare Metal: On-demand bare metal server options are widely available from providers operating within Phoenix. Companies like phoenixNAP and Hivelocity offer dedicated servers for workloads requiring maximum performance and direct hardware access.

Power Analysis

Phoenix has a well-deserved reputation for reliable and competitively priced power, which is a significant factor in its growth as a data center destination.

Average Cost Of Power: Industrial electricity rates are estimated to be between $0.07 and $0.09 per kWh as of September 2025. These competitive costs allow large-scale deployments to achieve a lower total cost of ownership compared to many other major US markets.

Power Grid Reliability: The regional power grid is known for its stability, supported by a diverse generation mix that includes significant nuclear and solar capacity. Major data center corridors are served by redundant substations and robust transmission infrastructure, ensuring high levels of uptime.

Market Access, Business & Tax Climate

Phoenix's business environment is highly favorable for data center operators and tenants, driven by strategic location and strong government support.

Proximity To Key Business Districts: Data centers are concentrated in areas like Chandler, Mesa, and Goodyear, offering secure, low-latency connectivity to the region's primary business, financial, and technology centers. This proximity is ideal for enterprises headquartered in the Greater Phoenix area.

Regional Market Reach: From Phoenix, networks can effectively serve end-users across Arizona, Southern California, Nevada, Utah, New Mexico, and Northern Mexico. Its location makes it a logical disaster recovery site for companies with primary infrastructure in Los Angeles.

Tax Advantage For Data Centers: Arizona provides compelling tax incentives that directly lower the cost of equipping and operating a data center. The state's Computer Data Center Program offers significant sales and use tax exemptions on equipment purchases for both operators and colocation tenants, making large capital investments more affordable.

Natural Disaster Risk

Phoenix has a High overall natural disaster risk profile, with a FEMA National Risk Index score of 91.66 as of September 2025. While free from many of the hazards affecting coastal regions, operators must engineer facilities to withstand specific environmental threats.

The primary risks for the Phoenix area are:

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