Data Centers in Utah

Utah – Cost-Effective & Resilient Colocation Hub

Executive Summary

Utah is a primary market for companies seeking a disaster recovery location or a cost-effective alternative to West Coast hubs like California. The state's combination of exceptionally low power costs, significant tax incentives, and a growing tech sector provides a stable and predictable environment for critical infrastructure. This allows businesses to scale operations while minimizing both capital and operational expenses.

Utah: At A Glance

Network & Connectivity Ecosystem

Utah provides a solid foundation for network-dependent operations, particularly in the Salt Lake City area, which serves as the state's primary interconnection point.

Carrier Density & Carrier Neutrality: Over 15 network providers operate in Utah, as of September 2025. The market offers access to multiple carrier-neutral facilities, ensuring competitive connectivity options.

Direct Cloud On-Ramps: The market features over 1 direct cloud on-ramp, enabling dedicated access to 1 cloud region as of September 2025. Local access is available for Google Cloud (GCP). For other clouds, connectivity is reliably established via private network extensions to hubs in Denver or Las Vegas.

Internet Exchange Points (IXPs): While public peering is limited, the Salt Lake City Internet Exchange (SLIX) facilitates local traffic exchange. Most large-scale peering occurs privately within major data centers or is routed through larger regional hubs.

Bare Metal: Bare metal server options are available from providers in the region, offering dedicated compute for performance-sensitive workloads. Service providers like phoenixNAP offer solutions in nearby Western US locations.

Power Analysis

Utah's power infrastructure is a key advantage for data center operators, characterized by low costs and a reliable grid.

Average Cost Of Power: Industrial electricity rates are approximately $0.07/kWh as of September 2025, placing Utah among the most affordable states for high-density computing. The state's power mix is primarily generated from natural gas and coal, with a growing solar component. This low cost directly reduces a significant operational expense for any large-scale deployment.

Power Grid Reliability: The power grid, particularly within the Salt Lake Valley, is well-engineered to support the demands of the region's growing tech and data center industries. Major data center corridors are typically served by redundant power feeds from separate substations, ensuring high levels of uptime.

Market Access, Business & Tax Climate

Utah's business-friendly environment and strategic location make it an attractive hub for accessing the Western United States.

Proximity To Key Business Districts: Data centers are concentrated near Salt Lake City, providing low-latency connectivity to the "Silicon Slopes" tech corridor. This proximity supports the area's robust ecosystem of software, hardware, and enterprise technology companies.

Regional Market Reach: Utah serves as an ideal central point for reaching markets across the Intermountain West, from Phoenix to Boise. It is also a popular disaster recovery location for companies with primary operations in California, offering geographic separation from seismic and other coastal risks.

Tax Advantage For Data Centers: Utah offers substantial, data center-specific tax incentives that can dramatically lower the cost of building and equipping a facility. These programs include long-term sales and use tax exemptions on equipment and potential property tax abatements, improving the total cost of ownership.

Natural Disaster Risk

Utah has a High natural disaster risk profile, with a FEMA National Risk Index score of 94.21 as of September 2025. The risks are entirely terrestrial, with no exposure to hurricanes or coastal flooding.

Key risks for consideration include earthquake, drought, wildfire, and riverine flooding. The state's location along the Wasatch Fault Zone makes seismic preparedness a critical factor in facility design and site selection. Facility operators in the region have extensive experience in building and managing infrastructure to mitigate these specific threats.