Data Centers in South Dakota
5 locations found
- SD
South Dakota Network Sioux Falls 2
5300 North La Mesa Drive, Sioux Falls
- T
Tierpoint SFW
5300 North La Mesa Drive, Sioux Falls
- SD
South Dakota Network Sioux Falls 1
2900 West 10th Street, Sioux Falls
- T
Tierpoint SFE
700 East 54th Street North, Sioux Falls
- GW
Golden West Telecommunications Rapid City
3850 Tower Road, Rapid City
Need Help?
Tell us about your needs and our team of experts will help you find and choose the perfect Data Center and solution at the best price.
Explore Markets in South Dakota
South Dakota – Low Risk & Strong Tax Incentives
Executive Summary
South Dakota is engineered for businesses prioritizing operational resilience and cost containment. Its exceptionally low natural disaster risk profile makes it a prime location for disaster recovery and secondary infrastructure. Aggressive, long-term tax incentives for data centers deliver direct financial advantages, reducing both capital and operational expenditures for critical IT assets.
South Dakota: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid connectivity for a secondary market, suitable for non-latency-sensitive workloads. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access cloud providers via private network extensions to hubs like Minneapolis or Denver. |
| Power Cost | $0.23/kWh – as of September 2025 | Industrial electricity pricing reflects a grid with a high percentage of renewables. |
| Disaster Risk | Low (NRI Score: 14.92) – as of September 2025 | One of the lowest risk profiles in the nation for natural hazards. |
| Tax Incentives | Yes | Multiple DC-specific sales, use, and property tax exemptions are available for qualified projects. |
| Sales Tax | 4.25% – as of September 2025 | State sales tax, though specific data center exemptions can eliminate this cost. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: South Dakota is a focused market with 4 providers, as of September 2025. While carrier density is lower than primary hubs, facilities offer access to major national backbones, providing reliable connectivity for most business needs.
Direct Cloud On-Ramps: There are no direct cloud on-ramps within the state, as of September 2025. Secure, low-latency connections to all major cloud providers are established through private network links to regional hubs like Minneapolis or Denver.
Internet Exchange Points (IXPs): Public peering is limited within South Dakota. Most network peering occurs privately between carriers or is routed through major exchange points in Minneapolis, a primary interconnection hub for the Upper Midwest.
Bare Metal: Bare metal server options are available from national providers. Services from providers like Hivelocity and ColoCrossing can be deployed to serve regional needs.
Power Analysis
Average Cost Of Power: Industrial electricity is priced at approximately $0.23/kWh, as of September 2025. The state's power mix is dominated by renewable sources, primarily wind and hydroelectric, ensuring a stable and sustainable energy supply. This higher power cost is a key factor to weigh against the state's significant tax advantages.
Power Grid Reliability: The electrical grid is well-maintained and reliable. The infrastructure benefits from low population density and significant investment in modern wind energy generation, supporting consistent power delivery to data center facilities.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in South Dakota are primarily located near the state's economic centers, Sioux Falls and Rapid City. They effectively serve regional finance, healthcare, and government sectors.
Regional Market Reach: The state is strategically positioned to serve as a secure disaster recovery location for companies in Minneapolis, Omaha, Denver, and other Midwest cities. Its central location provides a stable operating environment away from primary threat zones.
Tax Advantage For Data Centers: South Dakota offers one of the most compelling tax climates for data centers in the United States. The state provides long-term sales and property tax abatements on equipment and infrastructure for qualifying facilities, which dramatically lowers the total cost of ownership.
Natural Disaster Risk
South Dakota has a very low natural disaster risk profile, with a FEMA National Risk Index score of 14.92 out of 100, as of September 2025. This minimizes the threat of downtime from environmental factors and makes it an ideal location for business continuity.
Key risks are primarily weather-related and include Winter Weather, Ice Storms, Strong Wind, and Hail. The risks of catastrophic events like earthquakes or hurricanes are negligible.
