Create a data center site selection strategy for your business

Choosing a strategically located data center turns infrastructure into long-term performance. Site selection influences everything from grid capacity and renewable energy access to cooling efficiency and carrier availability. Ideally, you want a site that offers flexibility to meet current capacity while supporting future growth. 

Discover the different factors to consider in data center site selection, how to weigh them, and how geospatial mapping can enhance the decision-making process.

3 key factors in data center selection

Data center location directly influences a variety of operational and technical elements, including uptime, energy use, and costs. When evaluating potential sites, here are the main data center site selection criteria to consider.

1. Geographic and environmental factors

Physical conditions are one of the most important data center location considerations, as they shape performance and reliability. 

Cooler, drier climates enable more “free cooling,” reducing energy costs and extending equipment lifespan. On the other hand, hot and humid regions often require additional mechanical cooling and dehumidification, increasing operational expenses. Some cooling systems rely heavily on water, while others use air-based designs. When scouting, assess the local climate and water availability. 

Terrain and natural hazards inform construction, safety, and insurance. Choose locations outside high-risk flood zones with sufficient elevation and road access. In seismic regions, align architectural designs with building standards and soil conditions.

2. Infrastructure and connectivity

The surrounding infrastructure determines whether a promising site can support consistent performance and growth. 

Review existing capacity for power and the potential to expand within 3–5 years, such as rate structures and interconnection timelines to gauge the cost of ownership. You’ll also need to take into account utility rate structures and grid reliability. If your organization is focused on ESG, analyze local grid emissions and access to renewable energy sources.

When it comes to network connectivity and latency, consider the proximity of carrier routes and the number of fiber providers — multiple providers should use separate ducts and entry points to reduce single points of failure. Where possible, design a network ring so traffic can reroute instantly in case of outages.

3. Compliance, costs, and risks 

Regulatory requirements and the legal environment can make or break long-term viability. It’s critical to understand local and regional data privacy laws, such as GDPR, that govern how and when you can store data, and to secure any necessary permits early to avoid delays.

Costs will impact how you scale, so compare land, construction, and utility fees. There may be incentives and rebates available that could offset your capital costs. Look at the possibility of any geopolitical instability or economic disruption that could affect your supply chain and expansion.

How to create a data center location strategy

There’s no universal formula for selecting the ideal data center site, but the following steps can help you develop a strategy that fits your business needs and priorities.

Define outcomes and boundaries

Before studying maps, decide what success looks like. Are you optimizing for latency, scalability, or sustainability? Set clear outcome metrics to evaluate every location consistently, then outline hard boundaries to narrow your search. These might include regulatory restrictions, environmental hazards, or brand standards. Treat these criteria as guidelines to inform your decision-making process.

Build a trade-off framework

Every site choice will likely involve some compromise. When balancing trade-offs, create a simple scoring model around three pillars — performance, cost, and risk — to understand how each location aligns with your goals. You might also identify a few non-negotiables, such as network redundancy or energy pricing thresholds. 

Compare scenarios

A reliable data center site is one that continues to perform when conditions change. Assess each option against realistic scenarios, like a heat wave or extended grid outage, and measure how each site handles those situations. Frame these scenarios on a scale based on low, medium, or high stress levels — a site that maintains operational stability across all scenarios is better equipped to support continuity.

Evaluate the talent and vendor ecosystem

Even with the best infrastructure, smooth operations still depend on skilled people and partners. Map local labor availability for electrical, mechanical, and security roles, along with wage benchmarks for each. Do the same for vendors and service providers. When you need fiber contractors or an emergency response team, a strong regional ecosystem minimizes downtime and streamlines maintenance for data center deployment.

Turn layered data into shared decisions

Bring your findings to a collaborative mapping platform like Felt. A web-based geographic information system can layer data on climate, available land, and transport route in a way that lets teams annotate and discuss options directly on interactive maps. This makes decisions more efficient and transparent.

Make smarter site selection decisions with Felt

Choosing a data center location is a strategic balancing act. You have to weigh climate and cooling needs, power availability, and regulatory factors to find what’s truly viable. A data-driven approach helps you minimize risks and prioritize effectively so your center performs reliably, even when conditions change.

Felt brings the selection process onto one platform. You can layer a range of data points on a live map and test scenarios in real time, then use AI-native scoring to turn those criteria into quantifiable rankings. 

Explore Felt today and learn how the platform can help accelerate site acquisition. 

FAQ

What are the four main types of data centers?

The four main types of data centers are:

1. Enterprise: Owned and run by a single company for its own workloads, enterprise data centers are usually located on or near a corporate campus. They offer full control over security, network, and architecture, which is ideal for organizations with custom infrastructure.
2. Colocation: In a colocation data center, a third party owns and manages the facility while tenants install and maintain their own equipment. These sites often cluster in well-connected metropolitan areas to support high connectivity and low latency.
3. Cloud: Cloud data centers, operated by providers like Amazon Web Services and Microsoft Azure, allow organizations to access computing and storage resources over the internet rather than managing physical hardware. 
4. Managed services: Managed service providers handle infrastructure on behalf of the client, either in their own facility, a colocation center, or on the client’s premises. 

What role does connectivity play in location decisions?

Connectivity determines how efficiently data moves to and from users. A site’s location affects fiber route diversity and carrier availability, so organizations should prioritize regions with multiple providers using separate entry points to maintain connectivity if one path fails. As you scale, plan to add redundant routes to strengthen overall resilience.

Are renewable energy sources a major factor in site selection?

Renewable energy sources influence emissions and long-term power costs. When evaluating sites, compare local grid carbon footprints with renewable alternatives like on-site solar or wind systems. Shortlist locations that align with your ESG goals while maintaining operational performance and scalability.