08 Jun

Data Center Developers Look to Emerging US Markets

    As the demand for data centers continues to grow and popular locations like Northern Virginia become overcrowded, developers are exploring other regions in the United States for their expansion plans. Cities such as Atlanta, Las Vegas, Salt Lake City, and Denver are now on the radar of data center developers.

    Developers are feeling the pressure to broaden their horizons and find new locations for construction due to several factors. Rising land prices, limited availability of power and bandwidth, and opposition from local communities are driving them to seek out untapped regions.

    Northern Virginia, known as the data center capital of the world, currently houses 275 data centers with more on the way. However, the region is facing challenges such as dwindling space and power availability. In addition, residents are becoming increasingly impatient with the resource-intensive nature of these facilities, which consume significant amounts of power and water, as reported by the Washington Post.

    The reasons that initially attracted data centers to Northern Virginia were plentiful land, affordable power, tax incentives, and its strategic connection to Europe. Virginia serves as a hub for underwater cables carrying high-speed internet traffic between the US and Europe, making it desirable for data centers to be located nearby. Similarly, Southern California benefits from an underwater cable backbone that connects it to Asia, making it a popular hotspot for data centers.

    However, due to the scarcity of power and land, data center developers are now compelled to explore alternative locations. According to a quarterly report from datacenterHawk, some companies that were considering Northern Virginia for their data center needs are now turning to cities like Atlanta or Columbus. Similarly, requirements in California are shifting towards cities like Las Vegas, Salt Lake City, or Denver.

    One emerging market that has gained attention is in Central Ohio near the city of Columbus, where tech giants like Google, Facebook, and Amazon have recently built facilities. The selection of data center locations primarily depends on two key factors: the availability of affordable and ample power supply and the availability of robust network bandwidth, according to Ashish Nadkarni, Group Vice President and General Manager of Infrastructure Systems, Platforms, and Technologies at research firm IDC.

    Real estate costs also play a significant role, and while rural Virginia was once an affordable option, that is no longer the case. Nadkarni believes that the industry will find solutions despite the current challenges, but if the cost of build-outs continues to rise, providers may have to increase their prices.

    The next thriving locations for data center construction will be determined by factors such as network bandwidth, power availability, and real estate costs, Nadkarni added. From a customer perspective, the location of a data center has minimal impact, except for the potential inconvenience of having to travel farther to visit the facility.

    Share this