As the gateway for IT traffic to the Pacific Northwest and the network hub for the Midwest, the Minneapolis-St. Paul region is rapidly becoming a major technology hub. Already a major business hub with 17 Fortune 500 headquarters, the region was recently ranked by Forbes Magazine among the 20 Best Places for Business and Careers in the United States. The Twin Cities possesses a highly educated and diverse labor force, a thriving business community and a strong economy. This positions it as a strong choice for data center site selection with continued growth this year.

The Twin Cities is as attractive as it is ideal in almost every facet for data center site selection.  A combination of new state tax economic incentives, low utility costs, a favorable climate and a high-tech infrastructure makes the Twin Cities a logical consideration. When you consider the available fiber network is as robust as any Tier 1 market and the availability of reasonable shovel-ready land sites along with a low risk of natural hazards, this clearly makes the Twin Cities attractive.

In addition to the low utility rates, operational costs are further improved by the region’s cold weather climate, enabling on-site utilization of high efficiency air-side or water-side economizers.   

The growth in data centers has been robust with more than 25 developments completed totaling more than $2 billion in investments in the last five years, according to The Minnesota Department of Employment and Economic Development. Nearly 90% of these are in the Twin Cities, which also ranks eighth among the nation’s large metro areas for the size of its data-processing workforce.

The Twin Cities has seen rapid growth in the last 10 years

With the large number of Fortune 500 companies, there is a legacy of many having built their dedicated data centers in the region which they continue to operate today. As companies such as Ameriprise Financial, Ecolab, General Mills, Target and US Bancorp continue to grow, data center and service provider growth will continue to meet this demand. 

 The Twin Cities data center supply is at an all-time high with the rising development of new facilities by regional and national colocation providers to meet this demand. As companies move to mitigate the capital-intensive outlay required of data centers, the move toward the cloud and further colocation options is attractive. Most of the growth has been concentrated in the southern half of the Twin Cities in suburban cites such as Chaska, Eden Prairie, Eagan, Edina and Shakopee.  

Cologix is a prime example with its 45,000-square-foot Minneapolis data center colocation and interconnection space. Cologix’s three Minneapolis data centers provide network neutral environments and host the Midwest Internet Cooperative Exchange (MICE). The growth in MICE’s peering traffic has increased dramatically to over 80Gbps and places the Twin Cities at the forefront of a national trend of Internet traffic moving closer to Edge markets.  

The competitive data center landscape

Here’s a look at some of the noted competitors in the retail and wholesale colocation sectors of the Twin Cities market:

  • Stream Data Centers: Stream Data Centers has developed the 56,000-square-foot-building for US Bank. The center will incorporate two utility feeds from two separate substations designed to support 2.4MW of IT data load 
  • Cologix: Cologix operates three Minneapolis data centers and colocation interconnection space in the 511 Building, the most connected building in Minnesota.
  • Digital Realty: Digital operates two multitenant data centers with a 335,000 SF data center in Eagan and a 112,000 SF data center in St. Paul.
  • Flexential: The recently rebranded combined companies of Peak10 and ViaWest operate a 158,000 SF data center in Chaska.
  • DataBank: Owns and operates two data 2N data centers in the Twin Cities suburb cities of Eagan and Edina. The Edina location came through the acquisition of VeriSpace in March of 2013. The Eagan location is a purpose-built facility completed and opened in the spring of 2015.
  • Compass Data Centers: This is a 100,000 SF data center completed in 2014 in Shakopee
  • EdgeConneX: Owns and operates this highly connected 32,000 SF Eden Prairie data facility.

Sources: Data Center Knowledge, Forbes, Fortune, MDEDC and company websites

Conclusions

Though not a Tier 1 data center market, the Twin Cities is poised for strong growth as data center demand continues. With the competitive nature of the data center markets, the Twin Cities which contains the infrastructure, economic incentives, and regional attractiveness will be in the position to take advantage of these trends for further development as demand continues to grow throughout the country.

 

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