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Chicago Colocation: How the Windy City Became a Data Center Powerhouse
Beyond its famous skyline, sumptuous cuisines, and cultural richness, Chicago has another emerging landmark – its data centers. With the surge in demand for data center services, Chicago colocation offers a great mix of central location, robust connectivity, and affordability. Dive in as we unpack the reasons behind Chicago’s ascendancy in the colocation sector.
Chicago Has a Thriving Colocation Industry
Chicago has over 100 data centers and more than 500 megawatts of multi-tenant commissioned power. Chicago’s thriving market is the fourth largest in the United States, making it a strong competitor to other tier-one markets like Northern Virginia, Dallas, the San Francisco Bay Area, and Los Angeles. Cushman & Wakefield ranked the Chicago data center market as second in the world due to cloud availability, fiber connectivity, land prices, market size, vacancy, and the development pipeline.
Most data centers in Chicago are located in the city’s downtown area and western suburbs. Colocation facilities in downtown Chicago serves financial firms that need dense network connectivity with low-latency access to top global financial markets. They also support network and content providers that require consistent access to low-latency networks.
The western suburbs contain many purpose-built data centers, particularly within Elk Grove Village and Franklin Park. These suburbs attract numerous data center providers because they can access multi-acre plots of land at much more affordable rates than downtown Chicago.
Chicago’s strategic connection to other global markets makes it a prime location for businesses in need of scalable colocation space. The city is also surrounded by other thriving colocation markets in places like Lombard, Mount Prospect, Northlake, Oak Brook, and Westmont. Additionally, the Aurora data center industry has a large colocation cluster led by CyrusOne.
Chicago Data Centers Provide Robust Fiber Connectivity
Chicago has ubiquitous network connectivity, with over 100 network providers serving the region. It is relatively easy for colocation facilities to directly access fiber rings because of the city’s L system and underground infrastructure.
The city has numerous network providers with IT infrastructure that can provide low-latency internet connection services. As a result, Chicago facilitates low-latency connectivity to other major colocation markets in the United States and Canada. Three prominent carrier hotels dominate here:
- Digital Realty on 350 East Cermak Road in downtown Chicago.
- CoreSite on 427 South LaSalle Street in the suburbs.
- QTS on Ashland Avenue in the downtown area.
Chicago’s robust network infrastructure means colocation facilities can connect directly to their preferred providers. The city also has peering hubs and internet exchange points, making it an attractive location for businesses seeking data center solutions. Some prominent internet exchanges in Chicago include the Chicago Internet Exchange (ChIX), AMS-IX Chicago, and DE-CIX Chicago.
Major Cloud Providers Have Availability Zones in the City
Chicago is home to numerous local and global cloud providers that service colocation facilities. Major providers with availability zones in Chicago include Microsoft Azure, Amazon Web Services, Oracle, and Google Cloud. Popular data centers like CoreSite, CyrusOne, QTS, and Equinix are home to these cloud points of presence, or provide cloud onramps.
Chicago data centers also have access to numerous dark fiber providers like Charter Communications, Everstream, Cogent Communications, Verizon, Frontier Communications, and Crown Castle. This competitive market allows businesses to find a partner that matches their unique requirements and budgets.
Chicago Enjoys Affordable and Consistent Power Supply
The price of electricity significantly contributes to data center costs. Because the city has a deregulated electricity market, electricity prices are much lower than other tier-one data center markets in the United States. Prices are as low as 10.5 cents/kWh, compared to the national average of 14.73 cents per kWh. CBRE listed Chicago as the market with the lowest per kW rental rates globally, at $115 to $125 per kW.
Commonwealth Edison is Illinois’s largest electricity utility and the sole Chicago supplier. The city’s power infrastructure is almost underground, protecting it from harsh weather like strong winds, rain, and snow. As a result, Chicago can provide consistent power supply data centers can rely on. This makes Chicago colocation services an ideal option for most businesses.
Illinois also has a Renewable Portfolio Standard (RPS) goal to produce 40% of all in-state energy from renewable sources by 2030. This plan allows Chicago colocation facilities to meet their sustainability goals and access affordable renewable energy sources.
Chicago Has a Low Natural Disaster Profile
Compared to tier-one data center markets like Texas, Chicago is among the top US states with the least exposure to natural disasters. The city has no fault lines or volcanoes, hence the low historical index. Although the Chicago colocation market does not suffer from hurricanes and wildfires, it experiences one of the highest tornado exposure.
Illinois ranks third for the nation’s most tornadoes per 10,000 square miles. Due to this extreme weather, the state government develops disaster recovery measures and resources to protect businesses and citizens from the aftermath of such severe weather.
Average annual temperatures are usually low. The city has one of the lowest cooling degree days among other data center locations in the US. This helps to lower cooling costs for data centers leading to more affordable colocation options.
Chicago’s Business Environment Fosters Data Centers
Chicago’s central positioning makes it an excellent spot for businesses needing colocation support. Because it has a bustling and diverse economy, the city’s colocation market serves a global audience beyond North America.
With a population of over 2.7 million, Chicago is the third-largest city in the United States. It occupies a central geographic position, making it a prime location for businesses from the East and West coasts. In the Midwest, the city is the center of important sectors like finance, transportation, telecommunications, and agriculture. The state’s government also offers lucrative tax breaks to data centers.
In 2019, the Illinois Data Centers Investment Program offered tax breaks to data centers to promote construction and expansion. The bill exempts data centers and their occupants from paying sales taxes when they purchase equipment like storage, servers, and liquid cooling solutions.
To qualify for an exemption of over ten years, these centers must make an investment exceeding $250 million in total and create at least 20 jobs. All in all, Chicago’s tax breaks allow hyperscalers, cloud providers, and customers to save on additional data center costs.
Leading Chicago Colocation Providers
If you are exploring Chicago data center facilities, below are a few of our trusted partners. Contact Brightlio, and we can get you the best pricing on these and other Illinois colocation providers.
Evoque’s Chicago CHI1 data center is located in the Information Technology and Research Corridor. The facility offers over 194,000 square feet of space and 15 Megawatts of utility power.
Reasons we like Evoque’s CHI1:
- Superior connectivity options with 10+ on-network providers and access to the cloud via Megaport.
- Highly secure facility with six layers of security including a mantrap.
- Flexible service options including standard racks, high density racks, and cages.
- Multiple compliance certifications, including SOC 2, SOC 3, ISAE 3402, and PCI-DSS.
Hivelocity is a national provider of data center services, dedicated servers, and private cloud. Their ORD1 facility is conveniently located in the 350 E. Cermak data center. This facility is a central hub for North American network connectivity with over 70 carriers available.
Why we like Hivelocity’s ORD1:
- Tier 3 design with 100% network uptime since 2020.
- Strategically located in one of the most connected buildings in the United States, providing multiple routes to almost anywhere.
- Hivelocity offers flexible colocation options, including partial rack colocation starting at 4U.
- They offer other value-added services including DDoS mitigation, dedicated servers, and private cloud.
Psychz Networks’ Chicago DC location in the Digital Realty building at 600 S Federal Street. The facility offers 142,000 square feet of space and 10 Megawatts of power capacity.
Why we like Psychz’s:
- Privately owned provider that offers personalized support and excellent customer service.
- Flexible service options including full and half cabinets with power capacity between 1.92 kW and 4.99. kW.
- Other locations in Los Angeles, Dallas, and Ashburn, VA, make them a good fit for a national colocation strategy.
How Can Brightlio Help With Your Colocation Needs?
Brightlio remains committed to helping you select the right colocation partner for your business. Our team is always available to provide competitive Chicago colocation pricing and estimates, all at no additional cost to you.
Our reliable Chicago data centers will keep your company’s data safe and meet your needs and budget. We also offer technology solutions, including network connectivity, SD-WAN, unified communications, public cloud, and advisory services. We can offer a complete technology solution for your organization.
Contact the team today to get started!
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