Salt Lake City, the Data Center Industry’s Silicon Slopes, Just Became Even More Attractive

Salt Lake City, the Data Center Industry’s Silicon Slopes

The Salt Lake City region has long been a desirable data center location whose many advantages include extensive fiber infrastructure, low electricity and natural gas rates, renewable energy resources, and a “cold desert” climate that enables ambient cooling techniques, thus reducing data center cooling costs.

Up until very recently, however, the one critical criterion that Salt Lake City needed to level the playing field with competitors in data center markets such as Hillsboro, Oregon, was flexible infrastructure tax credits. So, when in its 2020 session, the Utah legislature passed Senate Bill 114 – Sales and Use Tax Exemption Amendments, modifying the sales and use tax exemptions related to certain data centers, the Salt Lake market gained an even higher foothold as one of the best places globally to site a colocation, enterprise, or hyperscale facility.

The Utah sales and use tax exemptions cover data centers of 150,000 square feet or larger, and are retroactive to data centers constructed after July 1, 2016. For example, Facebook’s mammoth Eagle Mountain data center, which broke ground in the spring of 2018, is covered by the amendment.

Under the Utah legislation, qualified data center owners, operators and customers are exempt from sales tax on purchases of data center equipment with an economic life of at least one year that is used in their operations. The exemption is not just limited to servers, but also covers other data center equipment and machinery, as well as standard maintenance, repair, and operating (MRO) parts. Additionally, these flexible tax incentives do not carry any mandates specific to capital investment, lease term, provisioned capacity, or job creation requirements.

Direct Access to the Cloud and Beyond                                                                                                                            

At least 27 states now use economic incentives to attract data center projects. But many of these states cannot match Utah’s pro-business environment; the state’s corporate income tax is only 5%, while Salt Lake’s personal income tax rate, combining state, county and city, is 4.95%. Nor can many states match the plentiful availability of affordable land for new data center builds and expansions in the Salt Lake City region, or Utah’s favorable profile for environmental risks and climate exposure – both of which are always significant criteria for data center site selection.

Not too long ago, Salt Lake City was considered a Tier 2, if not a Tier 3 data center market, but that’s rapidly changing. Just look at the recent launch of Google Cloud Platform in the region, which provides customers added flexibility to distribute their workloads across the Western U.S., including existing cloud regions in Los Angeles and Oregon.

As a number of large enterprises and tech companies have established roots in Salt Lake City, we’ve also seen PacketFabric deploy its software-defined networking platform at Aligned’s Salt Lake City data center (in addition to Aligned’s Ashburn, Dallas and Phoenix facilities), thus expanding customers’ connectivity options to the cloud and beyond. Along with Google Cloud, PacketFabric provides Aligned customers with private, direct access to major cloud service providers such as Amazon Web Services (AWS) and Microsoft Azure; connectivity to 160-plus Points of Presence (PoPs) in the U.S., Europe and Asia-Pacific; and interconnectivity to internet exchanges, network, and anything as a service (XaaS) providers.

The Salt Lake City area is also a growing tech hub boasting a highly educated workforce, making it a viable alternative to source talent as opposed to expensive Western data center locations.  In fact, a U.S. News & World Report ranked Utah as the sixth best state in the nation for higher education.  The city and surrounding region offer a widely celebrated quality of life and cultural attractions. And if soaring down a mountain is your thing, you’ll be thrilled to know that world class skiing and snowboarding is within a thirty-minute drive.

In view of the rising demand for latency-sensitive online services — the streaming content, video conferencing, cloud collaboration, eCommerce, social media and online gaming apps that increasingly occupy our professional and personal lives — it’s no longer realistic to serve the Salt Lake City market from as far away as Los Angeles. The outcome is that many enterprises and hyperscalers are deploying and expanding data center infrastructure, or planning to do so, in what has become known as the industry’s Silicon Slopes.

Aligned Tops Out Its Second Ashburn, VA Hyperscale Data Center

December 3 marked an exciting milestone for the entire Aligned team as we “topped off” our second hyperscale data center in Ashburn, VA alongside our general contractor HITT, other construction partners and representatives from Loudoun County.

HITT representative Mike Abe kicked off the celebration by congratulating all involved and inviting team members to sign a steel beam in order leave their mark on another momentous Aligned project.

Aligned’s SVP of Design and Construction, Michael Morris, followed by thanking all of Aligned’s construction partners for their diligence, dedication and hard work during a truly unprecedented time in our industry. He also gave kudos to the City of Ashburn and Loudoun County representatives, who were instrumental in enabling Aligned to uphold its continuous commitment to quality and speed to market.

Aligned Ashburn IAD-02
Aligned Ashburn IAD-02 Topping Off
Aligned Ashburn IAD-02 Topping Off Ceremony

Furthermore, Michael touched on the importance of working with local partners and subcontractors in order to bring more jobs to the local economy, the importance of attracting more business investment to the region and the critical importance of data centers during the COVID-19 era. Michael went on to emphasize the importance of safety for Aligned and its commitment to maintaining a safe working environment, from construction to operations.

Rounding out the event were HITT’s Michael LaBare with a Safety Moment as well as Tim Grab and Ryan Wagner.

Aligned’s multi-building hyperscale data center campus in Ashburn is approximately 26 acres. Construction on IAD-02 was kicked off shortly after the completion of our first Ashburn data center, which was finished in just 6.5 months. Our second data center, IAD-02, is a two-story, 513,000 sq. ft. building expandable to 120 MW – complete with an exterior mechanical yard. We are excited to continue our expansion and investment in Ashburn, supporting customers with adaptive, efficient data center solutions.

Aligned IAD-02 Ashburn Exterior
Aligned Ashburn IAD-02 Interior

To learn more about Aligned and our Ashburn data center campus, visit www.alignedenergy.com/data-centers/ashburn/.

Aligned’s Phill Lawson-Shanks and Mercy Manning Join REBA Advisory Board

Phill Lawson-Shanks, Aligned’s Chief Innovation Officer, and Mercy Manning, Vice President, Sales and Sustainability Strategy, have joined the Advisory Board of the Renewable Energy Buyers Alliance (REBA). REBA is an alliance of large clean energy buyers, energy providers, service providers and NGO partners that are unlocking the energy marketplace to lead a rapid transition to a cleaner, prosperous, zero-carbon energy future. The organization’s mission is to build a resilient, zero-carbon energy system where every organization has a viable, expedient, and cost-effective pathway to renewable energy, an objective that resonates with Aligned’s commitment to solving the world’s toughest sustainability challenges associated with data center infrastructure and energy consumption, as well as water usage.

The REBA Advisory Board consists of committees which align with the organization’s areas of focus, including Supply Chain & International Collaboration, Education & Engagement, Market Innovations, and Policy Innovations. Advisory Board members hail from such Big Tech companies as Amazon, Google and Microsoft, as well as global brands in such diverse industries as automotive, entertainment and retail, including General Motors, the Walt Disney Company, and Walmart.

“As responsible stewards of the environment, sustainability will always be at the core of what we do at Aligned,” states Lawson-Shanks. “With humankind in the midst of an era that will see demands for compute, networking and storage capacity reach unprecedented levels, data center providers are uniquely positioned to ensure a clean energy future. So, along with my esteemed colleagues at REBA, I am happy to take up the mantle of securing and democratizing renewable energy resources for companies across the global digital economy.”

In addition to his role as CIO, Lawson-Shanks heads Aligned’s cross-functional Sustainability Committee, of which Mercy Manning is also a member. Aligned’s Sustainability Committee is comprised of leaders from all corporate divisions, including Customer Experience, Design & Construction, Operations, Innovation and Technology, Finance, Audit and Compliance, and Branding. The Committee’s objective is to integrate sustainability and business initiatives to help Aligned and our customers reach their sustainability goals.

“Along with Phill, I am excited to join the REBA Advisory board as an industry stakeholder and support REBA’s collaborative action towards a resilient, zero-carbon energy future, ” says Manning. “Aligned’s sustainability journey began with water and energy efficiency, and continues today with matching 100 percent of our IT load with renewable energy sources across all our data centers. We also employ a sustainability lens and environmental metrics within our supply chain.”

“What’s good for the planet isn’t only good for business. As builders of the infrastructure underpinning the economic engines of our time, driving a clean energy future is essential for us all,” Manning adds.