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Northern California

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Northern California is the second largest data center market in the country. Most companies objectively evaluating the market for expansion should be deterred by the area’s expensive real estate, power costs, and risk of earthquakes. Despite these facts, consistent activity from large data center users and colocation/cloud operators over the last five years is the prime catalyst for the market’s impressive ranking.

Growth in the Northern California data center market has occurred in several cities south of San Francisco, with Santa Clara being home to the majority. One of the key reasons for the large data center market in Santa Clara is Silicon Valley Power, the city-run electric company, has consistently offered lower power costs to data center users. Santa Clara boasts over 40 data centers located in a three and half square mile area, an area rivaling “Data Center Alley” in Northern Virginia, the world’s largest concentration of data centers.

Northern California has a reliable and extensive electrical grid. In the Santa Clara/San Jose data center cluster, power is provided by both Pacific Gas & Electric and Silicon Valley Power. These companies encourage using renewable power such as solar, wind, and the more exotic biomass solutions. However, these “green” power sources can often increase a data center’s total cost of ownership. The average power cost throughout Northern California is extremely high. These high costs often factor into the decisions for Northern California-based companies to co-locate in Portland, OR or Seattle, WA, where the typical power cost for data center users is approximately two times less.