Brightlio Blog

In the last decade, more companies have turned to data centers to provide secure and reliable power and connectivity for technology infrastructure. Consequently, choosing the right data center provider has never been more critical. If you’re in the market for colocation services, consider exploring San Jose’s colocation market as a location for data center services.

Located in the San Francisco Bay Area, San Jose is known for its innovative technology industry, reliable network infrastructure, and supportive business environment. This article explores the top five reasons San Jose is an ideal location for data centers and colocation facilities.

Robust Network Infrastructure Provides Low-Latency Connectivity

San Jose is famous for being an interconnection point for many high-value tech companies in Silicon Valley. One popular interconnection provider is the CoreSite Data Center at 55 S Market Street, San Jose (SV1). This company provides over 65 networks, including international carriers and subsea cables like the southern cross trans-pacific subsea cable.

This subsea cable connects data centers in San Jose to places like Hong Kong, Malaysia, and Singapore. The cable has a capacity of 72 Tbps. It provides colocation facilities in the city with low-latency connectivity to global markets. Furthermore, data centers in San Jose have access to peering from the AMS-IX Bay Area, part of the Amsterdam Internet Exchange.

San Jose is also close to other strategic technology markets. These include Los Angeles, San Diego, Portland, and Seattle. By colocating in San Jose, customers have low latency access to some of the largest customer bases in the United States.

In addition to connectivity services, San Jose also has cloud on-ramps, including AWS direct connections, Azure Express Routes, and Google Cloud Interconnects. The presence of these cloud providers allows data centers to access reliable, low-latency networks in the city. Customers colocate in San Jose have abundant connectivity and cloud options.

San Jose is a Leader in Clean Energy

The average cost of electricity in the region is around 33 ¢/kWh. This price is 44% higher than the national average and 11% higher than the average power rate in California. Higher power costs increase the cost of colocation in San Jose

To manage the high electricity rates, data centers in the city rely on a steady stream of renewable energy. Over 60% of the city’s power supply comes from a mix of renewable energy like solar and wind.

Furthermore, San Jose has always advocated for a clean energy supply. In 2018, the city’s council signed the Climate Smart San Jose action plan into law. This is pledged to reach net-zero emissions by 2030. 

What’s more, many data centers in the city partner with the San Jose Clean Energy (SJCE) utility company to reduce power-related costs and support their customers with consistent quality service.

Colocation Facilities Can Rely on a Supportive Economic Environment

Many data centers are strategically located in San Jose because of its favorable economic policies and business environment. Here, we explore three key incentives San Jose data centers benefit from:

• Business Corporation Program: This economic program provides up to 30% refund to data centers that pay the local portion of the state’s use tax. Colocation facilities and their customers enjoy this break when they sign up for the Use Tax Direct Pay Permit program. They may also use their tax funds to purchase construction materials in San Jose.
• Foreign Trade Zone, San Jose: San Jose’s foreign trade zone allows data centers to save money on equipment-related costs. Data centers and customers can reduce, delay, or avoid customs duties tied to imported goods.
• Enterprise Development Authority: This body helps colocation facilities use low-cost bonds to cover all expenses related to investments made in the city.

Because San Jose provides many tax benefits to businesses within its borders, data centers flock to the city to reduce administration costs and attract customers at a more affordable price.

Data Centers in San Jose Have Access to an Educated Workforce

San Jose is the most populous city in the Bay Area and the third most populous city in California, after Los Angeles and San Diego. It is considered the financial center of Silicon Valley because the city is home to many tech corporations and international businesses. The presence of these large corporations serves as an attraction for many qualified IT professionals.

Furthermore, the city is near many top universities like the University of California, Berkeley, San Jose State University, and the University of California, Santa Cruz, all of which provide a steady stream of computer and engineering graduates. 

Over 50% of the city’s population has a college or master’s degree, making it one of the most educated cities in the United States. These knowledgeable professionals support various colocation facilities with the necessary skills to keep the data centers operational.

Recommended San Jose Data Center Options

The city has 27 colocation facilities and data centers serving international and local clients. Below are some of the options Brightlio recommends:

Evocative SJC7

Evocative’s San Jose data center, SJC7, is located at 534 Stockton Ave. The 21,000 square foot facility features an N+1 design. The carrier neutral facility features connectivity options including AT&T, Cogent, Paxio, Verizon, and Zayo.

Why we recommend this data center:

• It meets multiple compliance standards including HIPAA, SOC2, and PCI DSS.
• Evocative also has a site in nearby Santa Clara and Emeryville, providing multiple options in the area.
• The site offers other solutions include dedicated servers, private cloud, managed colocation, and managed security options.

H5 Data Centers

H5 San Jose data center is located at 2030 Fortune Drive. The 73,000 square foot facility is located near downtown San Jose. The carrier neutral data center offers multi-tenant options including private suites and cages.

Why we recommend this data center:

• It is one of the most well connected buildings in the area, offering access to top metro and international connectivity providers.
• Flexible space options including private suites, cages, and power shell-buildouts.
• H5 offers a national data center footprint, including sites in Atlanta, Nashville, New York, Minneapolis, San Antonio, Phoenix, Denver, and Portland. This makes them an excellent partner for a national colocation strategy or for cloud service providers that need broad geographic reach.

Other colocation options in the area include:

• SVTIX Data Center (250 Stockton Avenue, San Jose)
• Stack Infrastructure (2001 Fortune Drive, San Jose)
• CoreSite Data Center (55 South Market Street, San Jose)
• Equinix Data Center (5, 7, 9, and 11 Great Oaks Boulevard, San Jose)

In addition to a leading tech industry, the city is close to other data center markets, including San Francisco, Fremont, Oakland, and Sacramento. Businesses looking to serve and connect with customers in these locations can collaborate with data centers in San Jose.

How Brightlio Helps With San Jose Colocation Pricing

Are you exploring San Jose colocation options? Brightlio is committed to helping your business find the right colocation partner in San Jose, CA and other data center markets. How? We collaborate with a network of global data centers to provide customized colocation services that match your budget and data requirements.

We also offer other IT services to ensure your technology investment is a competitive advantage for your business. Some of our additional services include unified communication, network connectivity, and public cloud solutions.

Contact the team today to get started.

If you liked this article, you might like our guide on Irvine’s data center industry.