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Arkansas – Strategic Resilience and Lower Operating Costs

Executive Summary

Arkansas serves as a vital secondary market for organizations prioritizing geographic diversity and disaster recovery within the central United States. This region offers a secure environment for mission-critical infrastructure by leveraging industrial power rates and specific tax exemptions to maximize operational efficiency. Choosing this market provides a stable, cost-effective alternative to saturated Tier 1 hubs without sacrificing reliability.

Arkansas: At A Glance

FactorRating / DataNotes
Global Connectivity GradeBReliable regional backbone with growing fiber density for enterprise needs.
Direct Cloud On-Ramps0 – as of September 2025Dallas is the nearest primary cloud on-ramp hub.
Power Cost$0.07/kWh – as of September 2025Industrial rates remain significantly lower than the national average.
Disaster RiskModerate (64.08/100) – as of September 2025Balanced risk profile with exposure to regional weather events.
Tax IncentivesYesSales and use tax exemptions available for qualifying equipment.
Sales Tax6.50% – as of September 2025Standard state sales tax rate before local additions.

Network & Connectivity Ecosystem

Arkansas provides a stable connectivity landscape for organizations managing regional workloads or requiring low-latency paths between major central hubs. As of September 2025, the state supports a growing ecosystem of carrier-neutral facilities and diverse fiber paths.

Carrier Density & Carrier Neutrality: Carrier count: ~10–15 carriers as of September 2025. The market features a mix of national Tier 1 providers and specialized regional fiber operators, ensuring competitive transit options for enterprise customers.

Direct Cloud On-Ramps: Over 0, enabling access to 0 cloud regions as of September 2025. While no native on-ramps exist within the state, local providers offer high-capacity private extensions to major cloud hubs in Dallas and Chicago via PNI or wave services.

Internet Exchange Points (IXPs): Regional peering is primarily managed through the Arkansas Internet Exchange (AR-IX) in Little Rock, which helps keep local traffic within the state and reduces reliance on distant transit points.

Bare Metal: General availability of bare metal services is supported by providers such as Hivelocity and ColoCrossing, offering on-demand physical compute for high-performance requirements as of September 2025.

Power Analysis

Arkansas maintains a competitive advantage through its utility structure and energy mix, which directly benefits high-consumption data center tenants.

Average Cost Of Power: Industrial electricity averages $0.07/kWh as of September 2025. These rates are supported by a diverse generation mix led by natural gas, nuclear, and renewables, providing a significant cost buffer against volatile energy markets found in coastal regions.

Power Grid Reliability: The grid is supported by multi-substation redundancy in major corridors like Little Rock and Northwest Arkansas. Infrastructure in these areas is well-engineered to maintain uptime during peak demand periods and seasonal weather fluctuations.

Market Access, Business & Tax Climate

The state business environment is purpose-built to attract technology investment through lower overhead and direct financial incentives.

Proximity To Key Business Districts: Data centers are centrally located near the Little Rock metropolitan area and the rapidly growing Northwest Arkansas corridor. This proximity serves major retail, logistics, and healthcare headquarters that require localized edge computing.

Regional Market Reach: From a central location, providers can effectively serve the South-Central United States, reaching major population centers in Oklahoma, Tennessee, and Missouri with low-latency performance.

Tax Advantage For Data Centers: The state provides a targeted sales and use tax exemption for qualifying data center hardware and software. This policy significantly lowers the total cost of ownership for large scale deployments and technology refreshes.

Natural Disaster Risk

The Arkansas risk profile is categorized as Moderate (64.08/100) as of September 2025. While the state is inland and free from direct coastal threats, infrastructure planning focuses on resilience against atmospheric hazards.

Primary Risks: Tornadoes, River Flooding, Ice Storms, and Strong Wind. Secondary Risks: Heat Waves, Hail, and Wildfires.

Facilities in this region utilize reinforced structures and sophisticated climate control systems to manage these environmental factors. The moderate risk score makes it a viable location for redundant sites compared to high-risk coastal or seismic zones.

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