Data Centers in Rochester
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Rochester, Minnesota – Stable, Low-Risk Midwest Hub
Rochester offers a compelling, low-risk environment for workloads that require stability and cost-efficiency over hyper-connectivity. The market is an excellent choice for disaster recovery, secondary deployments, and applications serving the Upper Midwest, where low natural disaster risk and favorable tax incentives drive down total cost of ownership.
Rochester: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, limited long-haul fiber. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramps are in Minneapolis; private extensions are available. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial power rates for the region. |
| Disaster Risk | Low (FEMA Score: 24.66) – as of September 2025 | One of the lowest-risk profiles in the United States. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualified data centers. |
| Sales Tax | 6.875% – as of Midyear 2025 | Minnesota state sales tax rate. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Carrier diversity is limited, with fewer than 5 providers available in the market as of September 2025. This makes careful network planning essential, often leveraging connectivity from nearby Minneapolis.
Direct Cloud On-Ramps: There are no direct cloud on-ramps in Rochester as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure through network extensions to the primary regional hub in Minneapolis.
Internet Exchange Points (IXPs): Public peering is not a feature of the Rochester market. The majority of peering is conducted privately or routed through the MICE internet exchange in Minneapolis to achieve efficient traffic exchange.
Bare Metal: Bare metal server options are available, primarily through providers that can service regional markets. Options from companies like Hivelocity can serve deployments in the area.
Power Analysis
Average Cost Of Power: Industrial electricity costs in Rochester are approximately $0.08/kWh as of 2021. These competitive rates provide a significant operational cost advantage compared to many major US markets.
Power Grid Reliability: The power grid supporting Rochester is well-engineered for the region's needs. Infrastructure is built to handle seasonal demands, providing reliable service for critical facilities.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Rochester are positioned to support the area's world-renowned healthcare and biotechnology sectors. This proximity offers low-latency connections for research, data processing, and clinical applications.
Regional Market Reach: Rochester serves as a strategic digital hub for southern Minnesota, northern Iowa, and western Wisconsin. It provides an effective point of presence for reaching consumers and businesses across the Upper Midwest.
Tax Advantage For Data Centers: Minnesota provides a significant sales tax exemption on equipment, software, and electricity for qualifying data center projects. This incentive directly reduces both the initial capital investment and ongoing operational expenses for operators.
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 makes it an exceptionally stable location for mission-critical infrastructure.
The primary environmental risks to consider are severe winter weather, strong wind events, hail, and drought. The area faces minimal threats from catastrophic events like earthquakes, hurricanes, or wildfires, contributing to its reliability for data center uptime.
