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Data Centers in San Francisco

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San Francisco – Core of Silicon Valley Interconnection

San Francisco is a premier global technology and interconnection market, home to one of the world's most important digital ecosystems. It is the ideal location for enterprises that require low-latency connectivity to the West Coast, the Asia-Pacific region, and the dense concentration of tech companies in Silicon Valley. Locating here provides a direct network advantage that is critical for application performance and global reach.

San Francisco: At A Glance

FactorRating / DataNotes
Global Connectivity GradeAA top-tier global hub with extensive fiber infrastructure and dense peering opportunities.
Direct Cloud On-Ramps0 — as of September 2025Primary on-ramps are concentrated in nearby Silicon Valley hubs like Santa Clara.
Power Cost$0.22 - $0.26/kWh (est.)Power is more expensive than the U.S. average, a key operational cost factor.
Disaster RiskHigh (Score: 89.02)Primarily driven by seismic risk; modern facilities are built to high mitigation standards.
Tax IncentivesYesMix of general energy efficiency rebates and some data-center-specific programs.
Sales Tax7.25% (State) — as of Midyear 2025Local district taxes can increase the final rate for hardware purchases.

Network & Connectivity Ecosystem

San Francisco is one of the most connected cities on the planet. Its strategic location on the West Coast makes it a critical aggregation point for trans-pacific traffic and a core hub for cloud and content delivery.

Carrier Density & Carrier Neutrality: The market features excellent carrier diversity, with over 25 unique network providers available as of September 2025. This density ensures competitive pricing and resilient connectivity options from numerous carrier-neutral facilities.

Direct Cloud On-Ramps: While San Francisco proper has few direct cloud on-ramps as of September 2025, the broader Bay Area is a major cloud region. Direct, low-latency access to all major cloud providers is readily available from nearby data center hubs in San Jose and Santa Clara via private network interconnects and metro fiber rings.

Internet Exchange Points (IXPs): The region is home to several critical IXPs, including the San Francisco Internet Exchange (SFMIX). These exchanges facilitate massive volumes of direct traffic peering, reducing latency and improving network performance for participants.

Bare Metal: Bare metal server options are widely available from multiple providers. Companies like Hivelocity and phoenixNAP offer dedicated server solutions for workloads requiring maximum performance and control.

Power Analysis

Average Cost Of Power: Expect industrial power costs in the range of $0.22 - $0.26/kWh as of September 2025. This rate is higher than many other U.S. markets and must be factored into total cost of ownership calculations.

Power Grid Reliability: The power grid serving major data center corridors is well-engineered, with many facilities receiving power from multiple substations. Despite occasional statewide grid strain, data center uptime is secured by robust on-site UPS and generator backup systems designed for continuous operation.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in the Bay Area offer low-latency connectivity to San Francisco's Financial District, the South of Market (SoMa) tech hub, and the entire Silicon Valley technology corridor. This proximity is essential for financial trading, ad tech, and SaaS applications.

Regional Market Reach: The market provides effective service delivery to the nearly eight million people in the Bay Area. It also functions as the primary digital gateway for North America to the Asia-Pacific region, offering the lowest latency for businesses connecting between continents.

Tax Advantage For Data Centers: California provides several incentive programs that can benefit data center operators and tenants. These include rebates for installing energy-efficient systems and local utility programs designed to reduce power consumption, which help to offset the region's high operational costs.

Natural Disaster Risk

San Francisco is a high-risk area, with a Federal Emergency Management Agency (FEMA) National Risk Index score of 89.02 as of September 2025. All modern data centers in the region are purpose-built with significant structural and operational safeguards to mitigate these threats.

The primary risks for this market include:

  • Earthquake
  • Wildfire
  • Drought
  • Heat Wave
  • Landslide
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