Data Centers in Duluth
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Duluth, Minnesota, USA – Reliable Power & Low-Risk Colocation
Duluth offers a stable, low-risk environment for workloads that require high uptime and predictable operational costs. The market is an excellent choice for disaster recovery sites, secondary data hubs, and latency-tolerant applications that can benefit from its attractive power pricing and significant tax incentives. This combination ensures reliable performance and a lower total cost of ownership for critical infrastructure.
Duluth, Minnesota, USA: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, limited long-haul fiber routes. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest cloud hub is Minneapolis; private extension is available. |
| Power Cost | $0.08/kWh – as of 2021 | Very competitive pricing compared to national averages. |
| Disaster Risk | Low (24.66) – as of September 2025 | Very low exposure to major national disasters. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualified data centers. |
| Sales Tax | 6.875% – as of mid-2025 | Minnesota state sales tax rate. |
Network & Connectivity Ecosystem
Duluth is a regional connectivity hub with a focused ecosystem suitable for local and secondary deployments.
Carrier Density & Carrier Neutrality: The market contains 2 distinct providers operating 2 data centers as of September 2025. While not a major interconnection hub, businesses can access regional and national carriers for redundant connectivity. Carrier-neutral facilities are available.
Direct Cloud On-Ramps: There are no direct cloud on-ramps within Duluth as of September 2025. Secure, private connections to major cloud providers like AWS, Google Cloud, and Microsoft Azure are established through network providers via the primary regional hub in Minneapolis.
Internet Exchange Points (IXPs): Public peering is not established in Duluth. Most interconnection is handled privately or routed through the MICE internet exchange in Minneapolis to connect with other networks.
Bare Metal: Bare metal server options are available in the region, often deployed from nearby major markets like Minneapolis. Providers such as Hivelocity can serve customers requiring dedicated server infrastructure.
Power Analysis
Duluth provides a compelling advantage with its low-cost and stable power infrastructure.
Average Cost Of Power: The average industrial electricity rate is approximately $0.08/kWh as of 2021. This price is significantly below the U.S. national average, offering substantial operational savings for power-dense deployments.
Power Grid Reliability: The region's power grid is well-engineered, supported by a diverse generation mix. Infrastructure in key industrial areas is built to support consistent and reliable power delivery, crucial for data center uptime.
Market Access, Business & Tax Climate
Duluth combines strategic location with a favorable business environment for data center investment.
Proximity To Key Business Districts: Data centers in Duluth serve the city's port authority, healthcare, aviation, and higher education sectors. This proximity provides low-latency connectivity for local enterprise and public sector operations.
Regional Market Reach: The market is strategically positioned to serve businesses across the Upper Midwest, including Northern Wisconsin and Michigan's Upper Peninsula. It acts as an effective disaster recovery location for primary operations in Minneapolis-St. Paul.
Tax Advantage For Data Centers: Minnesota offers a significant financial benefit through a state sales tax exemption on data center equipment, software, and electricity for qualifying facilities. This incentive directly reduces both the initial capital investment and ongoing operational expenses, improving the overall return on investment.
Natural Disaster Risk
Duluth has a very low natural disaster risk profile, making it a secure location for critical IT infrastructure.
The FEMA National Risk Index score for the area is 24.66 out of 100, categorized as "Very Low" risk as of September 2025. The primary environmental risks are related to severe weather events rather than catastrophic disasters. Key risks include severe wind, winter weather, wildfire, hail, and drought. The region has no exposure to hurricanes, earthquakes, or coastal flooding.
