Data Centers in Minnesota

Minnesota – Resilient Midwestern Hub

Executive Summary

Minnesota is a top-tier market for organizations that require high uptime and low-latency access to the Upper Midwest. Its combination of affordable power, significant tax incentives, and one of the nation's lowest natural disaster risk profiles makes it an ideal location for primary production workloads and secondary disaster recovery sites. This market delivers operational stability and a lower total cost of ownership without sacrificing connectivity to major cloud and network providers.

Minnesota: At A Glance

Network & Connectivity Ecosystem

Minnesota's connectivity is centered around the Minneapolis-St. Paul metropolitan area, providing a reliable interconnection point for the northern United States.

Carrier Density & Carrier Neutrality: The state features a healthy ecosystem of over 30 carriers, as of September 2025. Carrier-neutral facilities offer diverse options for creating resilient network architectures.

Direct Cloud On-Ramps: With over 4 dedicated cloud on-ramps, as of September 2025, Minnesota provides direct access to major hyperscalers, including AWS and Microsoft Azure. These connections support hybrid cloud strategies by reducing latency and improving security for traffic between private infrastructure and 11 cloud regions.

Internet Exchange Points (IXPs): The primary peering point is the MICE (Midwest Internet Cooperative Exchange) in Minneapolis. MICE facilitates efficient local traffic exchange, keeping latency low for regional users and services.

Bare Metal: Bare metal cloud solutions are readily available from providers in the area, offering dedicated server capacity for performance-sensitive applications. Options include services from providers like Hivelocity and phoenixNAP.

Power Analysis

Average Cost Of Power: Industrial electricity rates average around $0.08/kWh, as of 2021. This competitive pricing offers a distinct advantage over many coastal markets, directly reducing the operational cost of running power-intensive hardware.

Power Grid Reliability: The power grid supporting the primary data center clusters in Minnesota is well-engineered and stable. Major facilities are typically served by redundant substations, ensuring high levels of uptime required for enterprise-grade operations.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are strategically located to serve the dense commercial hub of Minneapolis-St. Paul. This provides low-latency connectivity to the headquarters of major corporations in the retail, healthcare, and financial services sectors.

Regional Market Reach: Minnesota is an effective hub for serving the Upper Midwest, including Wisconsin, Iowa, and the Dakotas. It also acts as a natural gateway for businesses connecting to central Canadian markets like Winnipeg.

Tax Advantage For Data Centers: Minnesota offers a powerful sales tax exemption on data center equipment, software, and electricity for qualifying facilities. This incentive substantially lowers the initial capital investment and ongoing operational costs for new builds and major expansions.

Natural Disaster Risk

Minnesota has a very low natural disaster risk profile, with a FEMA National Risk Index score of 24.66, as of September 2025. This makes it one of the safest locations in the country for deploying critical IT infrastructure where uptime is non-negotiable.

The primary environmental risks are weather-related and manageable with standard facility engineering. Key considerations include:

• Winter Weather & Ice Storms
• Tornadoes
• Strong Wind
• Drought
• Hail