PHOENIX—As more global companies move data and information to the cloud, the cloud itself is actually moving closer to them. Phoenix and other North American data center markets have emerged as hotspots as operators and cloud providers follow affordable utility rates, tax incentives and a demand for expanded service offerings, according to JLL's annual data center outlook. For an industry expected to see revenue grow by 14% during the next two years, footprint flexibility has proven to be a key driver in data center locations.

Mark Bauer, managing director and Western lead for JLL's Data Center Solutions Group, tells GlobeSt.com: "Arizona is a natural fit for data centers, with a low incidence of natural disasters, a good mix of affordable power options and a range of data center deployment options. One of the most compelling advantages may be our favorable data center tax structure that passed legislation in 2013. This bill benefits everything from large data center development projects to colocation customers. This tax structure continues to be a leading driver, helping Arizona to win new business and assist existing companies to grow."

In Phoenix, utility costs hover around 6.2 cents per kWh thanks to Arizona's diverse fuel supply mix. This is an attractive rate compared to the national average of 7.4 cents per kWh of the markets JLL surveyed. In Phoenix, it has spurred demand from several key industries: technology, retail and e-commerce, and banking and finance (together making up 80% of the market). The remaining activity comes from telecom, healthcare and insurance users.