Data Centers in Madison

Madison – Cost-Effective & Reliable Midwest Hub

Executive Summary

Madison offers a stable and secure data center market, ideal for enterprises seeking a Midwest presence without the high costs of primary hubs like Chicago. The market is an excellent choice for disaster recovery, secondary production sites, and serving regional applications. This location balances strong connectivity and favorable business conditions, ensuring resilient and cost-effective IT operations.

Madison: At A Glance

Network & Connectivity Ecosystem

Madison's digital infrastructure provides reliable connectivity for businesses serving Wisconsin and the greater Upper Midwest. While not a primary interconnection hub, it offers a capable and resilient network environment.

Carrier Density & Carrier Neutrality: The Madison market provides access to over 5 national and regional carriers across its 8 data centers, as of September 2025. Carrier-neutral facilities are available, offering choice and competitive pricing for transit and transport services.

Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Madison, as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud, and Microsoft Azure through dedicated network links to the primary hub in Chicago. Private network interconnects and wavelength services ensure low-latency access.

Internet Exchange Points (IXPs): Public peering is limited within Madison. Most interconnection is handled through private peering arrangements within local data centers or by routing traffic through major exchange points in Chicago.

Bare Metal: Bare metal server options are available from providers in the region. Companies like Hivelocity and phoenixNAP can serve customers requiring dedicated, non-virtualized compute infrastructure.

Power Analysis

Average Cost Of Power: Industrial electricity rates in the Madison area are estimated to be between $0.08 and $0.10 per kWh, as of September 2025. These competitive power costs help reduce the total operational expense for data-intensive workloads.

Power Grid Reliability: The power grid serving Madison is well-engineered and stable, benefiting from investments that support the state capital and a major university. Data centers in the area are typically supported by redundant power feeds from separate substations, ensuring high levels of uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in Madison are positioned to serve the state government, the University of Wisconsin, and the city's growing technology, healthcare, and biotech sectors. This proximity allows for low-latency connections supporting critical local research and business operations.

Regional Market Reach: From Madison, businesses can effectively serve the entire state of Wisconsin and surrounding areas. The market also functions as an excellent disaster recovery site for deployments in larger Midwest hubs like Chicago and Minneapolis, providing geographic separation while maintaining manageable latency.

Tax Advantage For Data Centers: Wisconsin provides a significant sales and use tax exemption for qualifying data centers. This incentive applies to the purchase of IT equipment, software, and electricity, substantially lowering both the initial capital investment and long-term operating costs.

Natural Disaster Risk

Madison has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 60.48, as of September 2025. Its inland location shields it from hurricanes and coastal flooding, making it a secure site for critical infrastructure.

The primary environmental risks to consider are atmospheric and seasonal events, including:

• Tornadoes
• Winter Weather & Ice Storms
• Strong Winds
• Riverine Flooding
• Hail
• Wildfire