Data Centers in Sioux City
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Sioux City – Reliable Midwest Colocation Hub
Executive Summary
Sioux City, Iowa, provides a stable and cost-effective data center market for workloads that require a central US location without the expense of primary hubs. This market is a strong choice for disaster recovery sites, content delivery, and serving regional agricultural and industrial enterprises. The combination of significant tax incentives and a high percentage of renewable energy in the grid makes it financially and environmentally compelling.
Sioux City: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, suitable for most standard enterprise and DR workloads. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Direct access is available via network extension from nearby hubs like Omaha. |
| Power Cost | $0.07-0.09/kWh | A high mix of wind power helps keep industrial electricity costs competitive. |
| Disaster Risk | Moderate (43.14) | Primarily atmospheric and weather-related risks; seismic and coastal threats are negligible. |
| Tax Incentives | Yes | State-level sales and use tax exemptions are available for qualifying data center investments. |
| Sales Tax | 6.00% | Iowa state sales tax, as of Midyear 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: The Sioux City market includes 2 colocation facilities served by 1 primary network provider as of September 2025. Carrier-neutral options are available, providing access to regional and national networks for redundancy and performance.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Sioux City as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure through private network extensions to regional hubs such as Omaha or Des Moines.
Internet Exchange Points (IXPs): Public peering is not established directly within Sioux City. Most network peering is conducted privately between carriers or routed through major exchange points in larger Midwest markets like Omaha or Kansas City.
Bare Metal: Bare metal server options are available in the region, offering dedicated compute for performance-sensitive applications. Providers like Hivelocity can serve customers in this market through their broader network presence.
Power Analysis
Average Cost Of Power: Industrial electricity rates in the Sioux City area typically range from $0.07 to $0.09 per kWh, as of September 2025. These competitive energy prices, driven by a high concentration of renewable sources, provide a significant operating cost advantage for compute-heavy infrastructure.
Power Grid Reliability: The power grid in Iowa is well-engineered and reliable, benefiting from significant investment in wind energy infrastructure. Data centers in the area are supported by a sturdy grid designed to serve critical industrial and agricultural loads with high uptime. The energy mix is approximately 60% renewables, primarily wind.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Sioux City are positioned to serve the city's core industries, including food processing, manufacturing, and healthcare. This proximity allows local enterprises to implement low-latency hybrid IT and disaster recovery solutions.
Regional Market Reach: Sioux City serves as a strategic digital hub for the tri-state area of Iowa, Nebraska, and South Dakota. It offers effective reach to a population of several million across a key agricultural and logistics corridor in the central United States.
Tax Advantage For Data Centers: Iowa provides a compelling sales and use tax exemption on equipment and electricity for qualifying data center projects. This incentive significantly lowers the total cost of ownership for large-scale deployments, making the state financially attractive for new builds and expansions.
Natural Disaster Risk
Sioux City has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.14 out of 100, as of September 2025. The location is not exposed to major hurricane, earthquake, or wildfire threats.
The primary risks are weather-related and include:
- Tornado
- Strong Wind
- Hail
- Winter Weather
- Riverine Flooding
- Drought
- Cold Wave
