Data Centers in Modesto
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Modesto – Strategic Central Valley Colocation
Modesto serves as a cost-effective alternative to the primary San Francisco Bay Area data center markets. It is best suited for organizations requiring a California presence for disaster recovery, regional compute, or agriculture technology workloads without the premium cost and seismic risk of coastal hubs. This market provides strategic access to the Central Valley, enabling low-latency services for a significant economic region.
Modesto: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Good regional connectivity; limited long-haul fiber diversity compared to primary hubs. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest cloud access is in the San Francisco Bay Area (San Jose/Santa Clara). |
| Power Cost | $0.18 - $0.22/kWh | Based on California industrial rates; renewables make up over 40% of the grid mix. |
| Disaster Risk | High (89.02 NRI Score) | Significant exposure to multiple hazards, primarily earthquake, drought, and heatwave. |
| Tax Incentives | Yes | California offers energy efficiency rebates and some data center-specific exemptions in certain municipalities. |
| Sales Tax | 7.25% (State Rate) | The combined rate in Modesto is higher due to local taxes, as of Midyear 2025. |
Network & Connectivity Ecosystem
Modesto is a secondary connectivity market. It relies on nearby primary hubs like San Jose and San Francisco for high-density interconnection.
- Carrier Density & Carrier Neutrality: The market contains a focused group of regional and national providers, with at least 2 facilities present as of September 2025. Carrier-neutral options are available, though the ecosystem is not as dense as in larger California markets.
- Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Modesto data centers as of September 2025. Businesses connect to all major clouds, including AWS, Google Cloud, and Microsoft Azure, via private network extensions to the San Francisco Bay Area.
- Internet Exchange Points (IXPs): Public peering is not established in Modesto. The majority of peering occurs privately or through IXPs in the Bay Area, which offers access to the region's primary traffic exchanges.
- Bare Metal: Bare metal server options are available, providing dedicated compute resources for performance-sensitive applications. Providers like Hivelocity can serve the region.
Power Analysis
California's power grid is complex, with a strong push toward renewables but higher associated costs.
- Average Cost Of Power: Expect industrial power rates between $0.18 and $0.22/kWh as of September 2025. These higher costs reflect California's grid infrastructure and renewable energy mandates but can be offset by efficiency-focused data center designs.
- Power Grid Reliability: The power grid supporting Modesto is well-engineered for an agricultural and industrial region. Data centers in the area typically source power from substations with sufficient redundancy to meet uptime requirements.
Market Access, Business & Tax Climate
Modesto's location in the Central Valley offers a unique geographic and economic advantage.
- Proximity To Key Business Districts: Data centers here serve the significant agriculture, logistics, and food processing industries of the Central Valley. This provides low-latency compute for an economic engine distinct from the Bay Area's tech focus.
- Regional Market Reach: The market effectively serves California's inland population centers, from Sacramento to Fresno. For latency-sensitive applications, it provides a crucial midpoint between the Bay Area and Los Angeles.
- Tax Advantage For Data Centers: California provides tax incentives primarily through energy efficiency programs and rebates, which can lower operational expenses. Some municipalities offer specific exemptions, though these are not guaranteed in all locations.
Natural Disaster Risk
Modesto has a high natural disaster risk profile, driven by its location in a seismically active state with significant climate-related hazards.
The FEMA National Risk Index score is 89.02, indicating a risk level higher than most communities in the United States as of September 2025. The primary risks for data center operations include Earthquake, Drought, Heatwave, Riverine Flooding, and Wildfire. While not a coastal city, the area's infrastructure must be built to withstand seismic events and manage extreme heat.
