Madison Data Center Market

Overview

Madison is Wisconsin's second data center market after Milwaukee. It is a small market built on networks and enterprise IT rather than wholesale leasing. State government, the University of Wisconsin-Madison, health care software and insurance drive demand. A hyperscale campus proposed north of the city in 2025 moved to Iowa in 2026.

History

Madison's data centers grew out of its telephone and internet networks. Wisconsin Telephone opened its main exchange downtown in 1949, and AT&T still runs it. UW-Madison started the Madison Internet Exchange (MadIX) in 2000. Berbee Information Networks opened a data center at its Fitchburg headquarters in 1999 and sold colocation from 2000.

Alliant Energy moved its headquarters out of a downtown office tower in 2002. The Fiore Companies rebuilt it as Network222, the city's telco hotel. 5NINES opened downtown colocation there in 2004, in Alliant's old data center. SupraNet had opened its own data center on the west side in 2002. The State of Wisconsin moved into its purpose-built Femrite Data Center in 2006.

TEAM Technologies opened a data center in Fitchburg in 2008, with CDW Berbee as its anchor tenant. TDS bought TEAM in 2010 and grew the site to six data rooms by 2017. In 2024, US Signal bought it with the rest of TDS's OneNeck business. EdgeConneX opened an edge data center on East Broadway in 2015.

Hyperscale arrived late and left quickly. In July 2025, QTS Data Centers proposed a large campus in the Town of Vienna, north of Madison. The town rejected its offer, and the Village of DeForest rejected an annexation in February 2026. Alliant Energy said that month that QTS had chosen Iowa instead.

The Market Today

US Signal runs the largest colocation facility, in Fitchburg, and plans a fourth data hall designed for liquid cooling in 2028. Downtown, Network222 houses 5NINES, US Signal and a MadIX switch. Lumen runs a site on West Main Street, and SupraNet serves the west side. EdgeConneX leases a pod in the Dane County Data Exchange building, whose owner markets the remaining space to new tenants.

Enterprise data centers hold much of the market's capacity. Epic Systems runs an underground hosting data center on its Verona campus and has a large expansion certified for the state tax exemption. The state runs the Femrite Data Center, UW-Madison runs a campus data center, and American Family Insurance runs one at its headquarters. AT&T, TDS, Verizon and Brightspeed operate telephone exchanges across Dane County, and T-Mobile runs a mobile switching center.

Several enterprise data centers have closed. CDW left the former Berbee site, and TDS left its Middleton office data center. QBE sold its Sun Prairie campus in 2025. Landlords now market the former TDS and QBE data center spaces for lease.

Advantages

• Network hub. MadIX, Network222 and dense regional fiber give the market strong carrier choice for its size.
• Talent. The university, Epic and the region's software sector supply engineers and IT staff.
• Enterprise demand. Government, health care, insurance and research buyers create steady demand for colocation and network services.
• Ready space. Vacant former enterprise data centers offer built rooms with generators and raised floors.
• Tax incentives. Qualified data centers in Dane County pay no sales tax on equipment if they invest at least $150 million within five years.
• Cool climate. Long winters support free cooling for much of the year.

Challenges

• Moratoria. The City of Madison paused new data centers over 10,000 square feet in January 2026. Dane County, Westport, Middleton, Cottage Grove and Sun Prairie adopted their own pauses later that year.
• Size limits. Madison's draft zoning rules would ban data center buildings over 100,000 square feet and multi-building campuses.
• Community opposition. Residents in Vienna and DeForest opposed the QTS campus until it left the county.
• Small wholesale inventory. Most operating space is retail colocation or private enterprise rooms, so large tenants find little ready capacity.

Trends

• Enterprise to colocation. Companies are closing private data centers, and UW-Madison sought off-campus colocation for research computing in 2025.
• Liquid cooling. New colocation capacity in Fitchburg is designed for liquid cooling.
• Hyperscale goes elsewhere. QTS took its Dane County plan to Iowa, while hyperscale builds continue in southeast Wisconsin.
• Large-load tariffs. Madison Gas and Electric filed a tariff for customers of 100 MW or more in July 2026. It told regulators it had no current requests that large.

Power and Policy

Madison Gas and Electric (MGE) serves downtown Madison, the east side, Fitchburg and Middleton. Alliant Energy serves DeForest, Vienna, Verona and the west side near Excelsior Drive. Sun Prairie, Stoughton and Mount Horeb run municipal utilities. American Transmission Company (ATC) owns the high-voltage grid, and the Midcontinent Independent System Operator (MISO) runs the wholesale market. The Public Service Commission of Wisconsin (PSC) approves tariffs and large customer contracts.