Why Data Center Location Matters More Than Ever

Connectivity can be constructed anywhere, but the location has an impact on the quality of service it can provide to its customers. In order to cope with digital transformation and the resulting mountains of information and bandwidth demands, more and more businesses—across all sectors—are shifting servers to data centers outside their organizations. This enables benefits such as flexibility in infrastructure, improved recovery options, better collaboration, enhanced employee accessibility, and easy access to public cloud operators.

Now that the data center conundrum is no longer “build vs buy”—with capacity and complexity challenges clearly proving that “buy” won that war—the question has become:

• “Which partner do I trust?”
• “Where are their data centers located?”
• “Why does the location matter so much?”

While selecting a technology partner, location is arguably the key consideration in addition to price, scalability, uptime, and reliability. A good location ensures an integrated network and software ecosystem that can reach your audience or enable advanced analytics that outperform competitors. A bad location can lead to poor connectivity and performance issues.

Quality of Service

There is a lot to consider when choosing a data center partner—from physical security, disaster recovery, uptime assurances, service levels, scalability, and reliability, to ongoing support and maintenance. Businesses must strike a balance between treating location as a key consideration without making it the only one.

In principle, a data center with energy and connectivity can be constructed anywhere. But in practice, location significantly impacts the quality of service the facility can deliver.

Connectivity is fundamentally a cooperative activity based on proximity. Ideal connectivity depends on multiple redundant fiber connections to major bandwidth providers. The only way to provide consistent and reliable bandwidth at business-grade data center levels is to connect to numerous network providers. These providers usually cluster around major Internet exchanges or peering points.

When data centers are located close to these peering points, organizations benefit from low latency and highly redundant bandwidth.

However, no matter how much bandwidth a data center has access to, physics and internet infrastructure still limit performance. Data takes time to travel. Round-trip distances are often twice the physical distance, as both the request and response must cross the same network path.

This is crucial for any business; research consistently shows that users abandon slow-loading websites quickly. Network conditions and routing complexities—for example, data traveling through multiple routers or switches—add latency. The closer a data center is to its customers, the lower the latency.

Additional Considerations

A number of additional factors influence data center location decisions. These include:

• Local data protection and compliance laws
• Tax structures and incentives
• Access to local services and utilities
• Availability of high-quality networking infrastructure
• Skilled labor pool accessibility
• Provider track record and testimonials

Combined, these considerations show that the physical location of a data center is extremely significant. Space is increasingly limited in major cities, leading to a rise in “mega data centers” and large suburban facilities. As land prices rise, more data centers migrate away from city centers.

Building on the outskirts of major cities is not just about cost savings. It also requires understanding the national power grid, fiber provider routes, and the ability to offer on-ramp connectivity to public cloud services—which is essential for modern enterprises.

Businesses will look for data center providers that combine low-cost space and energy availability with rich, high-capacity connectivity. These facilities are usually far enough from city centers to support disaster recovery goals and avoid city pricing, but still near enough to serve both local and international businesses efficiently.

Conclusion

Is location really all that matters when choosing a data center? In short: no. Many factors must be considered, including availability, reputation, facilities, support, and cost. However, it is true that location plays one of the most important roles. Not only is geography important, but location directly affects many other factors critical to the success and performance of the data center.

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