Atlanta Colocation Market: Everything You Need to Know
Many companies turn to colocation facilities to help them efficiently manage and secure their business data. Retail colocation providers allow businesses to rent space, power, computing infrastructure, network, and security without being directly responsible for all these resources.
Atlanta, Georgia, might be the perfect city for you if you’re in the market for retail colocation services.
With over 70 colocation facilities and data centers, the Atlanta data center market has become a top player in the industry. Ranking among the top ten data center markets in the United States, Atlanta is known for its favorable colocation environment, affordable power cost, reliable network infrastructure, and juicy business incentives.
This guide explores the top 6 reasons you should consider data centers in Atlanta for your colocation needs.
1. Reliable Energy Makes Atlanta an Excellent Colocation Market
The average energy rate in Atlanta is around 16 ¢/kWh which is 32% lower than the country’s national average and 46% lower than tier-one data center markets like Los Angeles. Many generating plants and substations exist in Atlanta, and the state of Georgia oversees these energy providers to guarantee a reliable power supply.
Two powerful corporations regulate Atlanta’s power supply: The Georgia Power Company, which is responsible for servicing most parts of the city, and the Greystone Power Cooperative, which services outlying suburbs. Because utility cost is an important factor businesses consider in retail colocation, Atlanta uses a mix of alternative fuels to build an affordable and sustainable energy supply on which data center facilities can rely.
These alternative fuels include natural gas, nuclear energy, coal, and hydropower. As of 2019, only 6%-8% of the power in Georgia comes from renewable sources. Georgia’s government is investing heavily in green energy sources to match its sustainability goals. In 2017, Atlanta became the 27th U.S. city to commit to 100% renewable energy by 2035.
These alternative sources contribute to the low-cost, abundant power supply.
2. Atlanta Has a Thriving Data Center Industry
There are abundant data centers and colocation facilities to choose from in Atlanta. In 2022, the city experienced a 40% growth rate among primary markets in the data center industry, with over 71 megawatts of new inventory. Many data centers are located in the city’s downtown area. Cumberland, Norcross, Marietta, and Alpharetta are also home to retail colocation facilities.
With over 350 megawatts of multi-tenant commissioned power, the thriving competition among Atlanta colocation providers allows consumers to choose facilities that match their growing needs. Some popular retail colocation providers in the city include 365 Data Centers (Alpharetta and Smyrna), EdgeConneX (ATL01 and ATL02), Equinix (five sites: AT1 – AT5), DataBank, Flexential, Switch, Evocative (ATL1), and Zenlayer (ATL2)
3. Network Reliability and Latency Levels Are Favorable
Atlanta enjoys a robust and reliable fiber infrastructure and network service providers that make it possible for colocation facilities to sustain their business. These fiber networks span the CBD-Midtown area and the city’s suburbs.
Netstream and Fiberlight are popular companies that provide regional-focused fiber networks within the city. Additional fiber companies in the city include CenturyLink, LIT Networks, Southern Telecom, Crown Castle, Google fiber, and EarthLink.
The Atlanta Fiber Network (AFN) is also a differentiator for the city and a benefit for colocation customers. The AFN is a 200 mile network of fiber optic cables that traverses the city providing network speeds of up to 100 Gbps. The AFN is carrier-neutral, meaning all providers have access to the network to service their customers. This increases competition, and decreases costs.
In addition, Microsoft Azure is a prominent cloud service provider with three availability zones businesses can choose from. Other cloud providers in the city include N-iX, Netguru, Ripple IT, Zenlayer, and Velosio. The abundance of fiber and cloud providers in Atlanta makes it possible for colocation facilities to thrive.
4. Atlanta Has a Low Natural Disaster Profile
In over six decades, Georgia has only experienced 65 federally declared natural disasters compared to other prominent data center markets like California (284), Texas (255), and New York (95). In this section, we’ll highlight some common natural disasters and their corresponding risk to the city of Atlanta.
Thunderstorms and flooding
These are the most common natural disasters affecting Atlanta. Over the next three decades, the city may suffer a moderate risk of flooding. The office of emergency preparedness leads a periodic readiness and planning strategy to help protect the city and its businesses from damages that may result from extreme weather.
Atlanta is more than 450 km away from the Atlantic Ocean, minimizing the likelihood of damage from hurricanes that develop over the Gulf of Mexico and the Atlantic Ocean.
Earthquakes in Atlanta are a rare sight compared to other prominent data center markets like California. The largest earthquake in Georgia was in 1991, and the last moderate earthquake was in 2002. According to the U.S. Geological Society database, Atlanta is predicted only to have a 0.73% chance of an earthquake happening soon.
5. Atlanta Is Home to a Growing Community of Tech Companies
Also called the “Silicon Valley of the South,” Atlanta is home to over 1,000 tech companies and headquarters. The city also ranks among the top ten data center hubs in the United States. Popular companies stationed in the city include Microsoft, Cardlytics, Apple, Kabbage, Calendly, Google’s parent company Alphabet, and Pindrop.
Additionally, Atlanta is home to two popular tech communities that enable startups and established tech companies to thrive.
- The Atlanta Tech Village is a state-funded business incubator that supports young entrepreneurs across the state.
- The Atlanta Tech park is a tech accelerator developed to help potential investors set up shop in Georgia. The program is ideal for businesses still in their growth phase and in need of additional support like access to capital and a solid business network.
In 2022, the Atlanta colocation industry experienced the highest percentage growth compared to other primary markets like Phoenix and Dallas. With an increasing demand for retail colocation services in Atlanta, this competition allows businesses access to various providers that can match their unique requirements.
6. Atlanta Has Friendly Business and Tax Policies
When choosing a colocation facility, it’s essential that the area has friendly economic policies that support business expansion. As your business grows, you want a data center facility that can grow with you. Atlanta’s very friendly real estate industry makes it easy for data centers to set up and manage facility growth.
Coupled with affordable real estate rates, the state of Georgia provides tax breaks for Atlanta colocation facilities and data centers. To qualify for the tax exemption, data centers must maintain an average of new quality jobs during the investment period and match the minimum investment threshold based on the population of the county in which the facility resides.
Georgia’s government has introduced a new bill that extends the “Sales and Uses Tax” exemption for colocation facilities for another ten years. In addition, the new bill adds a clause that:
- Mandates data centers to create new jobs in counties with a population of fewer than 50,001 people.
- Allows data centers with a qualifying purchase of $15 million to be exempt from additional purchase tax.
This new bill will also allow colocation facilities in these counties to qualify for more federal tax breaks.
How Are Colocation Services Sold?
Many colocation facilities sell services based on criteria like space, power usage, network connectivity, cross-connects, and I.P. address space.
For example, data centers sell space as a rack- a vertical shelf where the company hosts its equipment. A standard industry rack size is 42 R.U., with some measuring as high as 60 R.U. Colocation facilities also sell power by the kilowatt-hour (kWh) with a predetermined quote of kWh per rack.
If you need more information, Brightlio’s guide provides an in-depth breakdown of all the costs your business may incur when you purchase retail colocation services.
The Bottom Line: How Can Brightlio Help?
With a mix of favorable business incentives, a robust fiber network, and a thriving tech ecosystem, data centers in Atlanta provide the perfect market for your colocation needs.
Our team offers competitive colocation pricing for Atlanta colocation facilities at no cost or obligation. We also provide cloud, network connectivity, and unified communications services to help your business enjoy a well-rounded tech solution.
Contact Brightlio today to select the right colocation partner for your data center needs and budget.