Data Centers in Owatonna
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Owatonna, Minnesota – Cost-Effective Midwestern Hub
Owatonna provides a strategic, low-risk location in the Upper Midwest for businesses prioritizing cost control and operational stability. It is well-suited for disaster recovery sites, secondary compute workloads, and applications that require a reliable footprint without the high costs of a primary coastal market. This market offers significant tax advantages and low power costs, directly improving total cost of ownership for infrastructure-heavy deployments.
Owatonna: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, though not a major national interconnection point. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | The nearest major cloud hub is Minneapolis. Private network extensions are available. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial rates offer significant operational savings for high-density deployments. |
| Disaster Risk | Low (Score: 24.66) – as of September 2025 | Very low overall risk profile compared to national averages. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualifying data center equipment and software. |
| Sales Tax | 6.875% – as of mid-2025 | Minnesota state sales tax. Exemptions can reduce this for data center operators. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Owatonna has access to over 2 providers, as of September 2025. The market supports carrier-neutral colocation, providing access to regional and national networks for redundancy and competitive pricing.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Owatonna, with 0 cloud regions accessible directly. The nearest major access hub is Minneapolis, where enterprises can connect to all major cloud providers via private network links or dedicated circuits.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Most interconnection is handled privately between carriers or routed through the primary regional hub of Minneapolis for peering at the MICE IXP.
Bare Metal: Bare metal server availability is supported through providers that can deploy into regional data centers. Options from providers like Hivelocity or ColoCrossing can serve the area, typically deploying from larger nearby markets.
Power Analysis
Average Cost Of Power: The industrial electricity rate in Owatonna is approximately $0.08/kWh, as of 2021. This competitive power pricing provides a distinct financial advantage for companies running power-intensive compute and storage platforms.
Power Grid Reliability: The power grid serving southern Minnesota is well-engineered for the region's industrial and agricultural needs. Data centers in the area benefit from reliable power delivery, with infrastructure designed to handle seasonal weather demands.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Owatonna are positioned to serve businesses throughout southern Minnesota, including the agricultural, manufacturing, and healthcare sectors. Its location offers a lower-cost alternative to the primary Minneapolis-St. Paul metropolitan area.
Regional Market Reach: Owatonna provides effective low-latency connectivity to the Twin Cities and can serve as a valuable disaster recovery location for businesses based in Minneapolis, St. Paul, and Rochester. It also provides a logical node for content delivery and services targeting southern Minnesota and northern Iowa.
Tax Advantage For Data Centers: Minnesota offers substantial tax incentives for qualifying data centers, including a sales tax exemption on equipment, software, and electricity. This program significantly reduces both the initial capital expenditure and ongoing operational costs for new and expanding facilities.
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. The area is not prone to catastrophic events like earthquakes or hurricanes, making it a stable location for long-term IT operations.
Key risks to consider are primarily weather-related and include severe winter storms, hail, strong winds, and tornados. Other rated risks for the region include heatwaves, drought, and potential for wildfire.
