Why colos are city slickers and hyperscalers are country bumpkins

Datacenter building decisions tend to fall into two camps with colocation providers plumping for urban areas while hyperscalers seek sites where electricity, land, and construction costs come cheaper.

A study by the William Marsh Rice University in Texas, commonly referred to as Rice University, found that colocation facilities tend to be found in areas such as cities for proximity to their business customers, while hyperscale server farms follow a different tack.

Giants like Amazon, Google, and Microsoft prefer to concentrate massive facilities in a relatively small number of lower-density regions, where energy, land, and construction costs are lower, making economies of scale easier to achieve, the researchers say.

The study, by assistant professor of strategic management Tommy Pan Fang at Rice University and Shane Greenstein of Harvard Business School, offers a large-scale statistical analysis of datacenter location strategies across the US. The aim is to provide both policymakers and firms ...