It is necessary for most midsize businesses to establish their own data centres in order to keep their operations running smoothly. This represents a significant financial investment. The construction of new data centres is a laborious process that takes several months of careful planning and requires millions of dollars. When it comes to the planning and construction of a new data centre, businesses simply cannot afford to make a mistake because these facilities are expected to have a lifespan of approximately 20 years.

This article covers several criteria that can be used for selecting a location for a new data centre and describes the problems that business data centres must overcome in order to function effectively. The majority of organizations today base their daily operations on the procedures that are enabled by information technology, and server farms are at the hub of the IT infrastructure of any firm. Critical business procedures are supported by data centres, which are the backbone of every corporation of medium or international size.

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The architecture of a data centre is essential to the provision of a wide range of services to customers, including web hosting, banking services, and telecommunications services. The requirements of enterprise-wide data centres are becoming more complicated as new technologies, such as e-commerce, smartphones, social networking, and mobile communications, become more widespread.

Companies of the calibre of Facebook, Netflix, and Google simply cannot manage even a single minute of downtime in their operations. They require a dependable facility that can run 24 hours a day, seven days a week, with no interruptions and offer scalable computing capacity to customers located all over the world. Companies are interested in constructing data centres in areas that are not vulnerable to natural catastrophes or acts of terrorism and that offer affordable and dependable resources, such as electricity, network connections, and transportation options.

Despite the fact that data centres are an essential component of any company, decisions regarding their physical placement are often left up to chance. Historically, most businesses have located their data centres in close proximity to their main headquarters. This is now undergoing a swift transformation, mainly due to the fact that the majority of the monitoring and management of the equipment may be done remotely. Companies are exploring new locations for their data centres, and it is no longer necessary that these facilities be located in close proximity to the corporate office. The following is a discussion of the primary economic, political, geographical, and social considerations that play a role in determining where the site will be located:

(1) Disaster Prevention

The process of selecting an appropriate location is the first step in mitigating the physical risk of a catastrophic facility collapse. In addition to the direct physical danger that is posed by natural disasters (such as earthquakes, hurricanes, lightning storms, tornadoes, and floods, etc.), data centres can be rendered inoperable by damage to the infrastructure required or by the inability of key employees and vendors to reach the facility. CIOs are required to select a region that has a minimal risk of natural catastrophes whenever they are considering where to build a data centre. A complete avoidance of regions that are classified as seismic zones is required.

(2) The Accessibility of Network Carriers

The ability to communicate effectively is essential to the operation of a data centre. For a variety of business procedures, each piece of hardware in a data centre needs to be able to connect with other devices located in different parts of the world. For their operations, businesses require reliable fibre connectivity. Because of the need for redundancy, the location should have more than one network provider. Due to the availability of low-cost power and simple access to fibre optic networks, Google decided to locate one of its largest data centres in Dalles, which is located in the state of Oregon in the United States. If your data centre has weak connectivity, you might as well not have it.

(3) Access to the Available Power

Data centres in the United States use the same amount of electricity as 2,500 regular residences. The need for increased power consumption from data centres is one of the primary reasons why energy efficiency in data centres is currently one of the most discussed subjects in the information technology sector. The cost of power for data centres has risen to become the second-greatest expense associated with the operation of data centres. Therefore, one of the most important criteria for site selection is the availability of an affordable and copious supply of power. If water-based cooling is to be used in the construction of a data centre, then both the availability of water and the cost of water must be taken into consideration.

(4) Transportation / Availability of Connectivity

Even while information centres could be established in relatively small cities, they must nonetheless be conveniently located near many modes of public transportation. Other members of the building crew, as well as the suppliers of information technology equipment, need to have an easy time getting to the construction site. Connectivity through the air is also recommended in order to facilitate the prompt transportation of support workers to the location in the event that they are required for emergencies.

(5) The Cost of Land & Buildings

Because data centres are such huge structures, the price at which the land can be purchased is an essential consideration in the site selection process. In general, land in more remote cities and towns is more affordable. Since data centres require a large number of lands, the cost of land in large cities is five times higher than the cost of property in small towns. Consequently, the construction of data centres outside of major cities is more cost-effective. Since it is very difficult to update the building that houses a 24-7 data centre, the cost of building development is another factor that needs to be taken into consideration.

(6) Structures of taxes, along with incentives and subsidies

Even if the management of a data centre is a strictly technical concern, political factors will still influence any investment choice that is made. The taxation of corporations is structured differently in each of the states. Because data centres require significant investments of money and time, businesses are always looking for ways to lower their tax burden. Companies that are interested in making significant capital expenditures in data centres are likely to look for locations that provide reduced taxes. As an illustration, the state of Washington has one of the lowest corporation tax rates in the United States. In addition, the state of Oregon provides numerous tax breaks to businesses that are in the process of establishing data centres.

(7) The Accessibility of Talented Workforce

Data centres not only generate a large number of jobs during the construction phase, but they also require on-site engineers to operate the site, including electrical engineers, telecom engineers, and IT engineers. When searching for a location for a potential data centre, it is essential for IT managers to take into account the local talent pool.

(8) Protection and Safekeeping

The city’s rate of violent crime requires investigation. Additionally, an analysis of the potential terrorist danger in the city under consideration for the location of the new data centre is required. The data centres’ physical security is of the greatest priority because even the slightest disruption to the facility can have an effect on business activities. The integrity of the data that are stored in data centres, which hold essential company data, cannot be endangered. Because of this, access to the data centre should be strictly regulated and continuously monitored.

(9) Management for Cities and the Environment

Which cities have the strictest regulations when it comes to the environment and business? Due to the enormous amounts of electricity, it uses, a data centre is not a very environmentally beneficial type of business. Some municipalities are adamantly opposed to the presence of many industries. It is necessary to obtain permits from the local municipalities in order to construct data centres, which can be a time-consuming process. Whenever searching for locations in which to construct new data centres, it is essential for DC planners to keep the surrounding communities in mind at all times.

(10) Circumstances of the Climate

Whenever looking for a location for a data centre, the environment and climate should be given a lot of consideration. Cities with a mild climate are chosen for the location of data centres because these facilities require cooler temperatures and better humidification. This is the reason why a large number of businesses are establishing their new data centres in extremely cold areas, such as Scandinavian countries in Europe and the Pacific Northwest of the United States.


Data centres are essential to the functioning of any modern-day business firm. The data centre industry is currently undergoing a revolution and maturing at the same time. Speed is not the only criterion that should be considered when determining the success of data centres. Efficiency in the use of energy and other resources, optimization of those resources, and continuity of business operations are also extremely significant aspects of information technology equipment. Because there is so much at risk, businesses need to make appropriate plans in order to provide the highest possible business value to the firm.

When selecting a location for a data centre, an organization needs to take into consideration a variety of financial, social, political, and geographical factors before making a final decision. These factors can be evaluated using a variety of mathematical models, such as hierarchical decision modelling and ranking and rating systems.