Is there any information available regarding which major metropolitan area in the US offers the least expensive colocation options in terms of both electricity and physical space costs?

It appears that Las Vegas has relatively low power costs, but there may be limited options for datacenters and transit. Central Washington is likely the cheapest in the country due to its hydropower, but also has limited colocation and transit options.

Some parts of North Carolina are popular due to their low costs. The cost of electrical and cooling infrastructure is a significant portion of colocation expenses, accounting for about one-third of the total cost in Phoenix, AZ.
However, outside of the most expensive cities in the US, such as NYC, LA, and SF, where real estate, labor, and electricity are twice the cost of other cities, the differences in colocation costs between inexpensive cities are relatively small.

Are there any additional smaller cities categorized as tier 2 or 3 that could be considered for colocation options?

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The cost of colocation can vary based on various factors such as location, electricity costs, real estate prices, and the specific data center provider. Generally, cities with lower electricity costs and more affordable real estate tend to offer less expensive colocation options.

Some cities that are often considered to have relatively lower costs for colocation services include:

1. Phoenix, Arizona: With abundant sunshine, Phoenix benefits from lower electricity costs compared to other areas in the US. It is home to a number of large data centers.

2. Dallas, Texas: Dallas has a favorable business environment and relatively low electricity costs, attracting data center providers and offering competitive prices for colocation services.

3. Atlanta, Georgia: Atlanta offers a combination of lower real estate costs and lower electricity costs, making it an attractive location for colocation facilities.

The top contenders for least expensive colocation options are:

Oklahoma City, Oklahoma: This Midwestern hub offers a unique combination of low electricity costs (around 7-8 cents per kWh) and affordable physical space (average rent of $1,500-2,000 per month for a 1,000 sq. ft. data center). The city's central location and relatively low cost of living make it an attractive option for businesses looking to reduce overhead costs.
Omaha, Nebraska: The "Gateway to the West" boasts a low electricity rate of around 6-7 cents per kWh and average data center rent of $1,000-1,500 per month for a 1,000 sq. ft. space. Omaha's strong IT infrastructure and business-friendly environment make it an appealing choice for colocation seekers.
Kansas City, Missouri: This vibrant city offers a competitive electricity rate of around 8-9 cents per kWh and average data center rent of $1,500-2,500 per month for a 1,000 sq. ft. space. Kansas City's central location and growing tech industry make it an attractive option for businesses looking to collocate.

However, I must caution that these options come with some caveats. Oklahoma City, for instance, has limited connectivity options, which might impact your business's internet reliability. Omaha, on the other hand, has a relatively high crime rate, which could impact data center security.

Cities like Atlanta, Dallas, Chicago, Phoenix, and Portland offer cost-effective colocation due to low power rates and tax incentives. Atlanta and Dallas stand out for affordable real estate and energy costs. Phoenix benefits from state tax breaks, while Portland offers low-cost power. These cities provide reliable, budget-friendly colocation solutions for businesses.

Ashburn, Virginia is often considered the most cost-effective city for co-location in the United States. The price is competitive, the infrastructure is excellent, and it is near major networks, making it a smart move.