Data Centers in Rochester
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Rochester – Low-Risk, Cost-Effective Colocation
Executive Summary
Rochester, Minnesota, offers a stable and cost-effective environment for enterprises prioritizing operational resilience and predictable spending. The market is an excellent choice for disaster recovery sites, secondary workloads, and businesses serving the Upper Midwest that require a low-risk profile. Its combination of affordable power and significant tax incentives delivers a compelling total cost of ownership.
Rochester: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A secondary market with reliable, though not dense, network options. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest cloud hubs are in Minneapolis and Chicago; private network extensions are available. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial power rates contribute to lower operational expenses. |
| Disaster Risk | Low (24.66) – as of September 2025 | Very low exposure to major natural disasters, enhancing uptime and stability. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualifying data center equipment and software. |
| Sales Tax | 6.875% – as of 2025 | Minnesota state sales and use tax rate. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality The market contains a focused set of regional and national providers, with at least one carrier-neutral facility available as of September 2025. While not as dense as primary markets, sufficient diversity exists for redundant enterprise connectivity.
Direct Cloud On-Ramps There are no direct public cloud on-ramps within Rochester as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure through network providers offering private links to major hubs in Minneapolis or Chicago.
Internet Exchange Points (IXPs) Public peering is not established locally. The majority of peering occurs privately or is routed through the MICE internet exchange in nearby Minneapolis to optimize traffic and reduce latency for regional users.
Bare Metal Bare metal server options are available, typically through providers that specialize in delivering services to secondary markets. Companies like Hivelocity can offer dedicated server solutions in the region.
Power Analysis
Average Cost Of Power Industrial electricity rates in Rochester are approximately $0.08/kWh as of 2021. This competitive pricing makes the market attractive for workloads with higher power consumption, offering significant savings over more expensive coastal markets.
Power Grid Reliability The power grid supporting Rochester is well-engineered and stable, reflecting Minnesota's strong infrastructure standards. Data center facilities in the area are typically fed by redundant power sources to support continuous operations.
Market Access, Business & Tax Climate
Proximity To Key Business Districts Data centers in Rochester provide low-latency connectivity to the city's world-renowned healthcare and technology sectors. This proximity is critical for applications that process sensitive medical data or support research and development activities.
Regional Market Reach From Rochester, organizations can effectively serve customers across the Upper Midwest, including Minnesota, Iowa, Wisconsin, and the Dakotas. It serves as a solid hub for regional content delivery and application hosting.
Tax Advantage For Data Centers Minnesota provides a significant financial advantage through its data center-specific tax incentives. Qualifying facilities can receive a state sales tax exemption on equipment, software, and electricity, which directly reduces both initial capital investment and ongoing operational costs.
Natural Disaster Risk
Rochester 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 for the area are weather-related and include:
- Tornado
- Winter Weather & Ice Storms
- Strong Wind
- Hail
- Drought
- Heat & Cold Waves
