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.