Data Centers in Houghton
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Houghton, Michigan – Stable and Strategic Digital Outpost
Executive Summary
Houghton, Michigan, is a niche market ideal for organizations prioritizing operational stability and disaster recovery over primary, low-latency connectivity. Its extremely low natural disaster risk profile makes it a compelling choice for secondary workloads, backups, and applications that are not sensitive to network latency. This market provides a secure and potentially cost-effective alternative to high-risk or high-cost primary data center hubs.
Houghton, Michigan: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid for a secondary market; not a primary interconnection hub. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest hubs are Chicago or Detroit; access via private network extension. |
| Power Cost | $0.10-0.12/kWh (est.) | Industrial power costs are competitive for the region. |
| Disaster Risk | Low (9.32/100) – as of September 2025 | One of the lowest-risk locations in the United States. |
| Tax Incentives | Yes | Includes sales and use tax exemptions for qualified data center equipment. |
| Sales Tax | 6.00% – as of July 2025 | Standard Michigan state sales tax applies to non-exempt purchases. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Houghton is a focused market with 2 providers available, as of September 2025. This environment is best suited for workloads that do not require dense, diverse carrier interconnects, relying instead on specific private network links back to primary hubs.
Direct Cloud On-Ramps: There are no direct cloud on-ramps in Houghton, as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure through network extensions or dedicated circuits to major interconnection hubs such as Chicago or Detroit.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Interconnection is typically handled via private peering arrangements or by routing traffic through IXPs in larger regional cities like Chicago.
Bare Metal: Bare metal server options are available, often provisioned to support specific local or edge computing requirements. Providers like Hivelocity can serve deployments in secondary markets like Houghton.
Power Analysis
Average Cost Of Power: Industrial electricity costs are estimated to be between $0.10 and $0.12/kWh, as of September 2025. This competitive pricing can lead to predictable and lower operational expenditures for power-intensive deployments. The state's power mix includes 11% renewables, with wind power being a significant component of that clean energy portfolio.
Power Grid Reliability: The regional power grid is well-engineered to handle local demand, including severe winter weather conditions common to the area. For critical infrastructure, facilities typically rely on multi-layered redundancy, including UPS and on-site generator backup.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Houghton serve the immediate needs of regional enterprises, government, and educational institutions like Michigan Technological University. It functions as an effective edge location for the Upper Peninsula.
Regional Market Reach: Houghton is strategically positioned to serve northern Michigan, northern Wisconsin, and can function as a disaster recovery site for businesses in Midwestern hubs like Detroit, Chicago, and Minneapolis.
Tax Advantage For Data Centers: Michigan offers significant tax benefits that lower the cost of building and equipping a data center. A key incentive provides a sales and use tax exemption on qualified data center equipment, directly reducing capital expenditures on servers, racks, and cooling systems.
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 places it among the safest locations in the nation for critical infrastructure.
The primary environmental risks are related to severe weather rather than catastrophic events. Key considerations include Winter Weather, Cold Waves, Hail, Strong Wind, and Tornados. The area has minimal exposure to major risks like earthquakes, hurricanes, or widespread wildfires.
