Others have already mentioned that the connectivity in these places is really good, and that's often why you go there. The other reason is you have employees t

Others have already mentioned that the connectivity in these places is really good, and that's often why you go there. The other reason is you have employees there who can go fix things when they break. In the early days of Square we had everything in a single datacenter in Mountain View and our office was in San Francisco. There were times when something broke in a bad enough way that someone had to drive to the datacenter. It was a while before we built the scale and redundancy to put a facility on the east cost, or in places where we didn't often go. But you're right, per square foot it's often quite expensive. At a certain scale you still buy space in the city for connectivity, but then you buy IP transit, or even dark fiber, to connect to a cheaper and larger facility. That could be in the same region, or it might be out in some farmland with cheap power and good tax incentives. We've seen lots of datacenters built in Washington and Oregon because the electricity is famously cheap hydroelectric. Like $0.02 - $0.03 per kWh. Last I looked a few (5-7?) years ago, industrial power in the Bay Area was closer to $0.10 per kWh and in Ashburn VA it was $0.08.