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Data Centers in Iowa

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Iowa – Resilient & Cost-Effective Infrastructure

Iowa is a prime market for enterprises prioritizing low operational costs, high resilience, and significant scalability. The state's combination of affordable power, generous tax incentives, and a very low risk of natural disasters makes it a strategic choice for businesses where uptime and total cost of ownership are critical.

Iowa: At A Glance

FactorRating / DataNotes
Global Connectivity GradeBStrong regional connectivity with diverse long-haul fiber routes.
Direct Cloud On-Ramps0 – as of September 2025Nearest hubs are Chicago and Kansas City; private network extensions are common.
Power Cost$0.07 - $0.09/kWhMix is ~60% renewables, primarily wind, offering stable and predictable energy pricing.
Disaster RiskModerate (43.14) – as of September 2025Very low overall risk score with manageable, well-understood seasonal threats.
Tax IncentivesYesDC-specific sales and use tax exemptions available for significant investments.
Sales Tax6.00% Iowa sales tax – as of September 2025State-level sales tax applies to non-exempt purchases and services.

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: The Iowa market features over 10 providers operating within 24 data centers, as of September 2025. This ensures healthy competition and diverse connectivity options in key colocation facilities, most of which operate on a carrier-neutral basis.

Direct Cloud On-Ramps: Iowa does not have any public direct cloud on-ramps, as of September 2025. Businesses connect to hyperscale clouds via private network extensions, such as PNI or wavelength services, to major interconnection hubs like Chicago or Kansas City.

Internet Exchange Points (IXPs): Public peering is limited within the state. The majority of network peering occurs privately between carriers or is routed through major exchange points in nearby metropolitan markets.

Bare Metal: Bare metal server options are readily available from providers serving the Midwest. Deployments can be sourced from national providers like Hivelocity and ColoCrossing to support compute-intensive workloads.

Power Analysis

Average Cost Of Power: Industrial electricity rates in Iowa typically range from $0.07 to $0.09 per kWh, as of September 2025. This competitive pricing, driven by a high concentration of wind energy, provides significant operational savings for power-dense deployments.

Power Grid Reliability: The state's power grid is well-engineered and reliable, particularly in the corridors where data centers are clustered. The grid benefits from a diverse energy mix, with approximately 60% renewables, which enhances stability and cost predictability.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in Iowa are strategically located to serve the financial services, insurance, and advanced manufacturing industries centered in cities like Des Moines and Cedar Rapids. This proximity provides low-latency connectivity for local and regional business operations.

Regional Market Reach: From Iowa, organizations can effectively serve a large portion of the central United States, reaching major markets like Chicago, Kansas City, Minneapolis, and Omaha with minimal latency.

Tax Advantage For Data Centers: Iowa provides a significant sales and use tax exemption on data center equipment, computers, and cooling systems. This incentive dramatically lowers the initial capital expenditure and ongoing hardware refresh costs for large-scale operators.

Natural Disaster Risk

Iowa has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.14, as of September 2025. The environment is stable and free from major seismic or hurricane threats, which simplifies disaster recovery planning. The primary risks are weather-related and include severe wind from thunderstorms (tornado), winter weather, hail, and drought.

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