Data Centers in Houghton
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Houghton, Michigan, USA – Cost-Effective Midwest Colocation
Houghton, Michigan presents a niche market for workloads that require geographic diversity and low operational costs rather than minimal latency to major population centers. It is a strategic choice for secondary disaster recovery sites, data archiving, and compute-intensive applications where power and cooling expenses are primary concerns.
Houghton, Michigan, USA: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid connectivity for a smaller market, suitable for non-latency-sensitive workloads. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network extension to hubs like Chicago or Minneapolis. |
| Power Cost | $0.09–$0.11/kWh | Favorable industrial power rates support high-density compute and storage deployments. |
| Disaster Risk | Low (9.32) – as of September 2025 | Very low exposure to major national disasters like hurricanes or earthquakes. |
| Tax Incentives | Yes | Includes sales and use tax exemptions for qualified data center equipment. |
| Sales Tax | 6.00% – as of September 2025 | Michigan state sales tax applies to non-exempt purchases. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: As a smaller market, Houghton has a focused carrier presence with at least two providers available in its single data center as of September 2025. Carrier neutrality allows customers to select the best provider for their needs, ensuring competitive pricing and service.
Direct Cloud On-Ramps: There are no direct cloud on-ramps within Houghton as of September 2025. Secure, private connections to major cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure are established through network extensions to primary interconnection hubs such as Chicago or Minneapolis.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Interconnection is typically managed through private peering arrangements established by on-net carriers or transit providers connecting back to larger exchange points in regional hubs.
Bare Metal: Bare metal server options are available in the region, often provisioned from providers with a presence in larger Midwest markets like Chicago. Services from providers such as Hivelocity can serve workloads requiring dedicated physical hardware.
Power Analysis
Average Cost Of Power: Industrial electricity rates in the Houghton area are estimated to be between $0.09 and $0.11 per kWh as of September 2025. This competitive pricing makes the market attractive for managing the operational expenses of power-intensive infrastructure. The state's energy mix includes 11% renewables.
Power Grid Reliability: The power grid supporting the region is engineered for the demands of an industrial and university town, offering stable service. Data center facilities typically feature redundant power feeds and on-site generation to ensure consistent uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Houghton primarily serve Michigan Technological University and regional businesses. The location is more about cost-effective, remote infrastructure than low-latency access to a major metropolitan business district.
Regional Market Reach: Houghton provides a valuable disaster recovery location for businesses in larger Midwest cities like Detroit, Chicago, and Minneapolis. It offers geographic separation from primary sites while remaining within the broader region for operational management.
Tax Advantage For Data Centers: Michigan offers significant financial incentives for data center operators and tenants. A key benefit is the sales and use tax exemption on qualified data center equipment, which directly reduces the capital expenditure required for deployments and hardware refreshes.
Natural Disaster Risk
Houghton has a very low natural disaster risk profile, with a FEMA National Risk Index score of 9.32 out of 100 as of September 2025. This makes it an excellent location for infrastructure requiring high levels of physical safety and uptime.
The primary environmental risks are severe winter weather, hail, high winds, and wildfire. The area has minimal exposure to catastrophic events like earthquakes, hurricanes, or widespread flooding that affect other regions.
