In industries ranging from financial services to health care and real estate, there is no denying business gets done in New York City. However, the Big Apple isn’t the only East Coast hub integral to commerce in the United States and abroad. Just across the Hudson River, New Jersey boasts the same fiber optic infrastructure and network of top-tier communications providers which allows businesses to operate as efficiently and often times more economically as its New York City counterparts.
The reasons enterprises and government entities choose New Jersey for their data center colocation needs are often one in the same. Most businesses consider several factors, including latency, physical location, power infrastructure, communications infrastructure, energy prices, cost of doing business, and risk of natural disaster.
Central Location with Easy Access
Having a data center in New York City comes at a premium as data center facilities face higher rents and higher power costs. With access to downtown New York City, New Jersey helps to bridge the disparity between latency and cost. In fact, New Jersey is within low-latency range — less than 1 millisecond — which makes it an ideal alternative for area businesses. Additionally, some data center providers will lease office space within the facility to allow customers the opportunity for on-site operations.
While the threat of natural disasters is the same for New York City and New Jersey, there is one distinction. Parts of New Jersey are on high ground and not within a FEMA floodplain, which served those customers well recently during Hurricane Sandy in 2012.
When deciding on a location for a data center, accessibility for staff and vendors is a top criterion. New Jersey is well positioned in terms of transportation when compared with New York City given Newark International Airport, the New Jersey Turnpike, and multiple interstate highways. Furthermore, the New Jersey Transit and Amtrak rail systems make New Jersey easier to access then other locations in metro New York.
Energy and Cost Efficiency
Statewide, New Jersey suffers from a reputation of relatively high energy prices. However, when compared to New York City, the cost of electricity is significantly lower. For example, Edison, New Jersey, which is 40 miles south of Manhattan, has an estimated lower cost of electricity by 30% to 50%.
New Jersey also has a substantial advantage in the cost of doing business. According to a PriceWaterhouseCoopers’ report, Northern New Jersey is 20.8% more expensive compared to the national average cost of doing business. While that number may not sound beneficial, it is when the report also points out that New York City is a whopping 50.7% more expensive than the national average, approximately 30 percentage points more costly than New Jersey.
While there is no right answer to the question — “Where should I locate my data center?” — most enterprises and government entities choose to adopt a regional colocation strategy, collocating in data centers with reasonable geographic proximity to where they do business. For companies with operations on the East Coast, New Jersey is a compelling place for data center colocation.
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