Data Centers in Phoenix

Phoenix – Premier Disaster Recovery & West Coast Alternative

Phoenix has become a primary North American data center market, offering a compelling alternative to California with lower operational costs and a favorable risk profile. Its robust power infrastructure and dense connectivity make it the ideal location for enterprises requiring high uptime for critical applications and scalable infrastructure to serve the Southwestern United States.

Phoenix: At A Glance

Network & Connectivity Ecosystem

Phoenix provides a superb connectivity environment, rivaling primary markets for performance and carrier access while offering a strategic geographic advantage. The ecosystem is mature, carrier-neutral, and built for low-latency workloads.

Carrier Density & Carrier Neutrality With approximately 50 unique network providers, Phoenix offers exceptional choice, as of September 2025. Multiple carrier-neutral facilities ensure competitive pricing and resilient interconnection options for colocation and bare metal deployments.

Direct Cloud On-Ramps The market features over 8 dedicated cloud on-ramps providing direct, private access to major platforms, including AWS, Azure, and Oracle Cloud. These connections support 13 distinct cloud regions, enabling secure, high-performance hybrid cloud architectures.

Internet Exchange Points (IXPs) The primary public peering point is the Phoenix-IX, which facilitates efficient, low-latency traffic exchange between networks. Most large-scale peering occurs privately within major interconnection facilities, offering direct paths between content providers, carriers, and enterprises.

Bare Metal Bare metal server options are widely available from multiple providers. Companies like phoenixNAP offer on-demand compute and dedicated hosting solutions, giving businesses an alternative to virtualized public cloud infrastructure.

Power Analysis

Phoenix's power infrastructure is a key reason for its data center success, characterized by affordable rates and high reliability engineered to handle extreme desert temperatures.

Average Cost Of Power Industrial electricity costs are competitive for a major US market. The energy mix is diverse, with significant contributions from natural gas (45%), nuclear (27%), and solar (13%), as of September 2025. This balance helps stabilize pricing and provides a path for sustainable power sourcing.

Power Grid Reliability The power grid serving the Phoenix metro is well-engineered and exceptionally stable. Data center corridors are supported by redundant substations and robust transmission infrastructure, designed to deliver consistent power even during periods of peak summer demand.

Market Access, Business & Tax Climate

Phoenix offers a compelling business environment with strong market access and some of the most attractive data center tax incentives in the United States.

Proximity To Key Business Districts Data centers are strategically located near business centers in Phoenix, Tempe, and Chandler, serving a growing technology and financial services sector. This proximity enables low-latency connectivity for local enterprise operations.

Regional Market Reach From Phoenix, organizations can effectively serve end-users across Arizona, Southern California, Nevada, Utah, and New Mexico. It is a strategic hub for reaching tens of millions of consumers with minimal latency.

Tax Advantage For Data Centers Arizona provides significant, long-term tax exemptions specifically for data center operators and their tenants. These incentives dramatically lower the total cost of ownership by abating sales and use taxes on equipment purchases, software, and electricity.

Natural Disaster Risk

Phoenix has a High natural disaster risk profile, with a FEMA National Risk Index score of 91.66, as of September 2025. However, its risks are fundamentally different and often more manageable than the coastal storm and seismic threats found in other major tech hubs.

The primary hazards for the region include:

• Drought
• Heatwave
• Riverine Flooding
• Earthquake
• Wildfire
• Landslide

The market's location eliminates direct threats from hurricanes, coastal flooding, or tsunamis, making it a premier North American disaster recovery site.