Data Centers in Owatonna
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Owatonna – Secure Colocation with Strong Tax Incentives
Executive Summary
Owatonna, Minnesota offers a compelling data center market for organizations that prioritize operational resilience and cost efficiency. It is an excellent choice for disaster recovery sites for businesses in the Minneapolis-St. Paul metro or as a primary location for enterprises needing low-latency access to southern Minnesota. The combination of very low natural disaster risk and significant state-level tax incentives creates a financially attractive environment for long-term infrastructure investment.
Owatonna: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, suitable for edge and DR, but not a primary peering hub. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | The nearest cloud access hub is Minneapolis; private network extensions are available. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial power rates contribute to a lower total cost of ownership. |
| Disaster Risk | Low (NRI Score: 24.66) – as of September 2025 | Very low risk profile for major natural disasters, enhancing uptime and security. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualified data center equipment and software. |
| Sales Tax | 6.875% – as of Midyear 2025 | Minnesota state sales tax. Exemptions can significantly reduce capital expenses for data centers. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Carrier count is over 2, as of September 2025. The market provides focused, reliable connectivity through regional providers, with at least one carrier-neutral facility available for interconnection.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Owatonna, as of September 2025. Secure, private connections to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, are established via dedicated circuits to the primary interconnection hub in Minneapolis.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Most network peering is conducted privately or routed through the MICE internet exchange in Minneapolis to optimize traffic paths and reduce latency.
Bare Metal: Bare metal server options are available in the broader region, enabling businesses to deploy dedicated compute without capital investment. Providers like Hivelocity and phoenixNAP can service deployments in the area.
Power Analysis
Average Cost Of Power: Industrial power costs in the Owatonna area are approximately $0.08/kWh, as of 2021. This competitive rate helps lower the ongoing operational expenses associated with high-density compute and storage environments.
Power Grid Reliability: The power grid supporting the region is well-engineered for industrial use. Local data centers are typically supported by redundant power feeds from separate substations, ensuring high levels of uptime for critical operations.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Owatonna sits strategically along the I-35 corridor, providing low-latency access to businesses in southern Minnesota and northern Iowa. It effectively serves key industries in the region, including manufacturing, agriculture, and healthcare technology.
Regional Market Reach: This market is an ideal location for disaster recovery and business continuity for organizations based in the nearby Minneapolis-St. Paul metropolitan area. It also functions as an effective edge location for content delivery and application processing closer to end-users in the Upper Midwest.
Tax Advantage For Data Centers: Minnesota provides substantial tax incentives that directly benefit data center operators and their customers. The state sales tax exemption on computer equipment, software, and electricity for qualifying facilities drastically reduces both initial build-out costs and ongoing expenses.
Natural Disaster Risk
Owatonna has a very low natural disaster risk profile, with a FEMA National Risk Index score of 24.66 out of 100, as of September 2025. This minimizes the threat of environmental disruptions to data center operations. The primary risks are weather-related and include tornadoes, winter weather, strong winds, and hail. The region has a minimal risk of earthquakes, wildfires, or flooding, making it a physically secure location for critical IT infrastructure.
