Many Phoenix businesses experienced challenges over the past five years, but data centers have been a success story in the market. Data center users and operators have been extremely active in Phoenix recently, spurring an increase in supply to meet the demand from users both in and out of the market. As Phoenix's business climate improved, opportunities and growth were created for data center users and operators from across the United States.

From a geographic perspective, most of the colocation data center providers are located in Phoenix proper and Chandler, AZ, though new opportunities are emerging in the suburbs of Mesa and Goodyear. The Phoenix market benefits from its reasonably low power cost, especially when compared to the highly-occupied Northern California and Los Angeles data center markets, where there is a significant price difference. Demand in Phoenix originates from companies in the market and companies outside that view the Phoenix market as a disaster recovery location. When compared to other major U.S. data center markets, Phoenix is very competitive as it relates to colocation rates, power cost, and tax incentive opportunities.

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