Data Centers in Billings

Billings – Cost-Effective Colocation in the Mountain West

Billings offers a compelling economic advantage for workloads that are not latency-sensitive to coastal hubs. With some of the lowest power costs in the nation, zero sales tax, and specific data center tax incentives, it provides a stable and highly cost-effective environment for deploying digital infrastructure. This market is ideal for disaster recovery sites, backup storage, and compute applications where operational expense is the primary driver.

Billings: At A Glance

Network & Connectivity Ecosystem

Billings is a regional connectivity hub with a focused carrier ecosystem sufficient for enterprise and backup workloads.

Carrier Density & Carrier Neutrality: The market contains 5 colocation facilities operated by 3 distinct providers as of September 2025. This provides foundational options for redundancy and carrier-neutral interconnection.

Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Billings. Businesses connect to hyperscale clouds by procuring private network services, such as Layer 2 circuits or waves, to major access hubs in Denver or Seattle.

Internet Exchange Points (IXPs): Public peering is not established locally. The majority of traffic exchange is handled privately between carriers or routed through major peering centers in Denver.

Bare Metal: Bare metal server options are available, providing dedicated compute resources for businesses requiring performance without capital expenditure. Providers like ColoCrossing offer services well-suited to the market's cost advantages.

Power Analysis

Montana's power profile is a primary driver for data center operations in Billings, defined by low costs and a favorable generation mix.

Average Cost Of Power: Industrial electricity rates range from $0.05 to $0.07 per kWh as of September 2025, placing Billings among the most affordable markets for power in North America. This low, stable pricing delivers a significant operational cost advantage for high-density deployments. The state's power mix is 57% low-carbon and renewables, with the remainder from fossil fuels.

Power Grid Reliability: The regional power grid is reliable and engineered to support industrial operations. Data centers in the area typically source power from redundant substations to ensure high levels of uptime for critical infrastructure.

Market Access, Business & Tax Climate

Billings combines strategic regional access with an exceptionally favorable tax environment, creating a strong business case for data center investment.

Proximity To Key Business Districts: Data centers in Billings serve the city's commercial hub and provide critical infrastructure for regional industries like energy, agriculture, and healthcare. This proximity supports local enterprise IT and disaster recovery needs.

Regional Market Reach: The market is strategically positioned to serve businesses across Montana, Wyoming, and the Dakotas. It acts as an effective edge location or disaster recovery site for companies in the broader Mountain West region.

Tax Advantage For Data Centers: Montana's complete lack of a state sales tax creates immediate savings on all data center hardware and software purchases. Furthermore, the state authorizes local governments to offer property tax abatements of up to 75% for qualifying data center investments, directly reducing long-term fixed costs.

Natural Disaster Risk

Billings has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 59.12 out of 100 as of September 2025. The location avoids significant hurricane, tornado, and coastal flooding threats common in other regions.

Primary risks for the area are environmental and atmospheric, including:

• Wildfire
• Drought
• Winter Weather & Cold Waves
• Hail
• Earthquake (low probability, but present)