October 6, 2015

Cobbler a la Mode – North Carolina’s Delicious New Data Center Incentive Program


Not surprisingly, the recent passage of North Carolina’s highly attractive data center tax incentives bill has prompted renewed attention to the state as an optimal locale for data center development. But the reality is, the climate in N.C. has been ripe for data center development for some time.

Over the past several years, big name companies such as Apple, Facebook, Google, IBM and EMC, have all constructed massive data center facilities in North Carolina. What the state’s new legislation has now done is expand to occupants of multi-tenant data centers the same benefits previously available only to mega-scale users.

SEE ALSO: IT vs. Facilities: Beware of the “Streetlight Effect” in Data Center Due Diligence

The greatest impact of the new incentive structure is to provide sales tax exemption on IT equipment, data center componentry and electricity for all occupants within qualifying large-scale multi-tenant data centers. This means that a 20 cabinet, 200 kilowatt user will reap the same economic benefits as the 800 pound gorillas constructing mega-scale, multi-megawatt facilities for their own use.

Combined with an already tasty backdrop of extremely low power costs and low construction costs, North Carolina’s revamped incentives structure is the scoop of vanilla alongside fresh peach cobbler — it was already delicious, but now it’s truly irresistible. With power rates for some providers below $0.05 per kwh, the all-in cost of occupancy for NC multi-tenant users is now irrefutably among the lowest in the country.

“With power rates for some providers below $0.05 per kwh, the all-in cost of occupancy for NC multi-tenant users is now irrefutably among the lowest in the country.”

While critically important to all users, the recipe for optimal data center location includes more ingredients than just economics. One can operate a cost-efficient data center in Iceland or Buffalo, yet there remain the thorny issues of getting to, connecting to and finding employees wanting to move to (wait for it…) Buffalo! Layer in network, weather and seasonal access complexities and the cost benefits of remote locations often evaporate before they’re fully baked.

Yet, North Carolina’s – particularly the research triangle region’s – history and culture as an academic and technology-focused hub, coupled with the region’s low cost of living and desirable work / life balance — has cultivated ideal conditions for hiring and retaining top IT and data center talent. Just last month the National Consortium of Critical Operations launched the nation’s first Mission Critical Operations degree to be offered at Cleveland Community College in Shelby, NC.

Long story short, for organizations hungering for both quantitative and qualitative superiority in assessing prospective data center locales, North Carolina is serving up a pretty delicious alternative. And not just during peach season…


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