5 Considerations for Choosing Data Center Locations

Editor’s Note: This blog was originally published in August 2024. It was updated in May 2026 to include the latest information.

Today’s IT leaders think a lot about critical workloads that generate revenue. But not all of them think much about where they should run said workloads and the associated digital infrastructure.

This could be a costly mistake.

All enterprise workloads, even those running in the cloud, are hosted on physical servers somewhere. Where those servers live has a big impact on performance, cost, resilience, compliance, security, sustainability and more.

Enterprises need to contemplate many variables as they locate their digital infrastructure, and few locations can meet every business requirement. That’s why working with a global digital infrastructure provider like Equinix can be so helpful.

When you deploy in an Equinix colocation data center, our experts have considered key site selection criteria on your behalf. Let’s examine some of these criteria:

1. Cloud connectivity
2. AI enablement
3. Proximity to industry ecosystems
4. A stable, renewable energy grid
5. Weather and climate concerns

1.    Cloud connectivity

In many ways, data gravity guides the site-selection conversation.

If your data is largely already in the cloud, then you’ll want data centers nearby to help service it, and you’ll need to consider how to connect to those data centers:

• If you use the public internet, you won’t have any service-level assurances, and you’ll miss out on potential cost efficiencies.
• If your data center doesn’t have cloud proximity and direct connectivity, you’ll experience high latency.
• Poor performance means you won’t be able to use cloud services to their full potential.

Deploying data centers in cloud-dense locations also enables hybrid multicloud, since data can move between on-premises systems and cloud as needed. This can help you use cloud services while also applying security and compliance controls in your on-premises environment. To maintain compliance with impending requirements for data sovereignty, this infrastructure flexibility will be essential.

Equinix is the global leader in low-latency cloud on-ramps. With robust access to cloud providers in key market locations, our customers can tap into innovations that enable network transformation, cloud-adjacent data structures and distributed AI infrastructure.

2.    AI enablement

Wise organizations have moved past AI as a buzzword. They’re now planning how to operationalize and monetize it.

Organizations typically take a different approach for revenue-producing AI use cases, compared to non-revenue AI such as HR applications. The latter will likely run on SaaS solutions that incorporate AI. This reinforces the importance of building guardrails to protect sensitive data and your reputation. It’s often more effective to deploy these gateways on edge infrastructure. This approach ensures access to external AI tools and services, but also observability and control of every query performed.

For revenue-producing AI functions, you must ask yourself: Would the places we train models today still be right for us after we shift our focus to inference? Any single-platform approach leans more toward vendor lock-in than optionality. The reality is that a distributed AI approach offers both flexibility and control.

Many enterprises have begun running AI inference outside of public clouds. Data sensitivity and tokenomics are key factors driving this trend. As you consider inference, you’ll need to think about staging both data resources and GPUs. What’s the latency tolerance for facilities that rely on these services? Network and internet service providers play a critical role in meeting these requirements and ensuring a successful deployment, so it’s important to deploy in locations with high densities of NSPs and ISPs.

For GPUs: Are you using GPUs as a Service (GPUaaS) or deploying your own? Operating your own GPUs will require higher power density and cooling. A single rack of NVIDIA DGX H100 GPUs can consume more than 100kW and may require rear-door heat exchangers or direct-to-chip liquid cooling. Equinix is an industry leader in liquid cooling solutions.

If you choose GPUaaS, you’ll likely acquire those services from a neocloud. Equinix has one of the largest densities of neoclouds available, and offers private, ultra-low latency connectivity via Equinix Fabric®.

Success with distributed AI will require moving data between multiple providers and geographies. Equinix Fabric is the ideal backbone to support this.

3.    Proximity to industry ecosystems

Enterprises exchange data with business partners in their industry. A vendor-neutral colocation data center supports that data exchange, but only if it’s in the right location to ensure low-latency connectivity for all ecosystem partners. Here are some examples of the challenges industry ecosystems present:

• Healthcare: Hospitals and research centers are often affiliated with universities, which aren’t always located in major metros. Despite this, they need reliable connectivity with ecosystem partners like pharma companies, insurers and regulators.
• Financial services: To unlock advanced AI uses cases and support regulated digital assets like stablecoins, today’s financial institutions must coordinate with many service providers and industry partners, all while meeting stringent compliance requirements.
• Telecommunications: As telcos build out 5G networks and operate IP transit, they need to be wherever their users are. This means they need to be just about everywhere. They need the right infrastructure in the right locations to help them connect with end users and ecosystem partners with minimal latency.

For these and other industries, edge data centers can fill in the gaps that larger core data centers can’t reach. A global portfolio of interconnected data centers across both core and edge can help you reach all your ecosystem partners, no matter where they’re located. Equinix provides that global portfolio. Our data centers make it quick and easy for ecosystem partners to find and interconnect with one another in all the right places. That’s one reason Equinix recently surpassed half a million interconnections across our global footprint.

4.    A stable, renewable energy grid

Data center operators must deploy in locations with plentiful renewable energy on a stable grid. This can help ensure a reliable supply of energy for their facilities, while also meeting their sustainability goals. At Equinix, we use power purchase agreements (PPAs) to scale renewable energy coverage quickly and support local grids in communities where we operate.

Location also impacts the availability of PPAs. Wind and solar projects work well in some regions, but not others. Also, PPAs are difficult in certain places due to regulatory challenges or the immaturity of local energy markets.

In some places, it’s also helpful to use on-site power generation such as fuel cells and rooftop solar panels. These technologies directly reduce the demand that data centers place on local grids. Working with a global colocation provider like Equinix can help enterprise customers take advantage of different energy initiatives in different places throughout the world.

5.    Weather and climate concerns

Average temperatures in a region factor into efficiency. Warmer metros logically require more energy to cool IT equipment, which can drive up costs and complicate sustainability efforts. However, data center operators can’t avoid a region just because it’s hot; they need to work around that and run the most efficient facility possible given the circumstances.

Location also has a big impact on water consumption in data centers. That’s because there’s a trade-off between energy efficiency and water efficiency in data centers, based on the choice of cooling technology:

• Evaporative cooling consumes less energy, but more water.
• Air-cooled building chillers consume no water, but more energy.

A global provider like Equinix must strike the right balance: using air-cooled chillers in places experiencing water stress and evaporative cooling in places experiencing power constraints. This enables the ideal mix of resource efficiency, which in turn helps customers with their sustainability goals.

Data center operators may also avoid locations where extreme weather events are common. But again, a global service provider doesn’t always have this choice; if their customers need to be in a particular location, they need to make it work while mitigating the risk.

Since data center operators can’t prevent or avoid extreme weather, the next-best thing is to respond quickly to predictions and give customers as much warning as possible. When customers are deployed on a global interconnected data center portfolio like ours at Equinix, they can quickly move key workloads away from the impacted area to minimize disruption.

See the benefits of a global data center platform

No single data center can optimize all the criteria named above, which is one reason that deploying with a global colocation provider can offer better results than operating private data centers. Not only has Equinix considered these and other factors when locating our 280 colocation data centers across 77 global metros, but we also offer our customers longevity and stability.

When you plan a data center migration, weighing the pros and cons of particular locations, the last thing you want is to do it all again a few years later. As your business needs change and pull you toward different locations, being at Equinix allows you to move while minimizing disruption. This can help you feel confident that your data and workloads are in the right places, and that they will be for the foreseeable future.

Learn how the right data center partner can unlock a global approach to enabling innovative new technologies, connecting with the right partners in the right places, and overcoming sustainability concerns: Read the High-Performance Data Centers for Dummies guide today.