Dallas-Fort Worth Becomes Second Largest Data Center Market in the United States

by Michael Rareshide, on Oct 22, 2018 2:41:30 PM

The Dallas-Fort Worth data center market is on a major roll and in 2018 has become the second largest data center market in the U.S. The DFW market has 2.99 million square feet (SF) of commissioned data center space with 334 megawatts (MW) of commissioned power, according to datacenterHawk, one of the leading research portals dedicated to the data center market.

By this measure, Dallas-Fort Worth has overtaken the Silicon Valley with only Northern Virginia being larger. In data center site selection, the DFW region enjoys distinct competitive advantages, including robust power infrastructure, economic incentives and an overall favorable business climate to develop both enterprise data centers and colocation operations.

The forecast for data center traffic will exceed 25% compounded annual growth rate (CAGR) through 2021, according to the Cisco Global Cloud Index. Data center storage in data centers will exceed a 35% CAGR over this same period. The primary drivers to this growth are the continued trends toward (a) cloud computing and workloads, (b) migration of private data centers to third-party managed colocation facilities, (c) customer demand for more content-driven capacity on their devices, and (d) business demand for significant “big data” analytics. The DFW region is projected to be a major player in this growth.

The Dallas-Fort Worth metro area has many factors in its favor 

While other top data center markets may have certain focused business concentrations, Dallas- Fort Worth’s data center demand has come from very diversified sectors, including healthcare, financial services, insurance, energy and a fast-growing presence in cloud and technology sectors. The DFW data center market enjoys this varied ecosystem, which is also reflected in the enormous competitive landscape of wholesale colocation, powered shell and global operators having (and expanding) major operations here. 

The data center submarket in DFW comprises ~10 separate data center geographical clusters.  Just about all of these have the competitive advantages mentioned above. However, the recent trends over the past two years show a strong preference toward the far North Dallas quadrant.  In particular, both the West Plano/Legacy submarket and the Richardson/East Plano Corridor submarket (which includes the expanding adjacent Garland and Allen municipalities) have multiple projects and campuses either under construction or in final planning phases.

Major data center operators and formidable competitors

Out of many data center operators, cloud facilities, large retail colocation competitors and wholesale colocation and powered-shell developers, the following are the notable competitors that have built a large presence throughout the DFW Metroplex:

  • Digital Realty: As the largest in the DFW Metroplex, Digital operates multiple Dallas area campuses including over 1 million SF and 100+ MW at its ~70 acre Richardson campus and one of the primary carrier hotels at 2323 Bryan in downtown Dallas. In 2017, it also announced a new nearby campus in Garland that can accommodate over 1 million SF of commissioned space.
  • Equinix: In the first half of 2018, Equinix purchased the 1.6 million SF InfoMart carrier hotel in Dallas where it had been of the largest tenants; Equinix has another major presence in Plano (North of Dallas) at the T5 Data Centers campus.
  • CyrusOne: With two existing Dallas area campuses totaling 90+ MW design load, CyrusOne is now building its third campus in Allen where it will have over 1 million SF and 100 MWs.
  • QTS: At its Irving campus, QTS transformed a 700,000 SF semiconductor facility into 290,000 SF of raised floor design load of 140 MWs, where it can further expand by another 400,000 SF; QTS also has a Fort Worth location with its 2017 acquisition of a 280,000 SF purpose-built enterprise data center.

Several other competitors have formidable operations and continue with further significant expansion in the Dallas-Fort Worth market including:

  • Cyxtera: With its acquisition of the CenturyLink data center colocation portfolio, its DFW location totals 265,000 and 25 MWs.
  • RagingWire: With its campus in the fast-growing Garland data center corridor, the turnkey and wholesale data center developer can deliver over 1 million SF and 80 MWs with phase one being 230,000 SF and 16 MWs.
  • T5 Data Centers: This long-time wholesale colocation developer operates its West Plano “T5@Dallas” campuscomprising 300,000 SF of purpose-built data center space; its latest project, “T5@Alliance” in Fort Worth could provide over 400 MWs from two separate transmission sources.
  • TierPoint: With its two DFW locations, one in Dallas and its new construction with Compass Data Centers in the East Plano/Allen corridor, this cloud and colocation provider will exceed 150,000 SF of raised-floor environment.
  • EdgeCore Internet Real Estate: A new player founded in 2017, EdgeCore is located in the Richardson/Garland cluster where it can deliver over 165 MW of critical load across 890,000 SF from its on-site substation.

DFW improvements needed in this key data center metric

What has been noticeably absent in the DFW region has been the presence of the hyperscale cloud data centers  — those massive facilities operated by major cloud internet and social media corporations such as Google, Apple and Amazon. The Northern Virginia region around Ashburn dominates this category and secures its status as the No. 1 data center market. Up until 2018, Facebook operated the most notable hyperscale data center, and it continues to expand its billion-dollar development in Fort Worth with plans to exceed 1.5 million SF. Other notable cloud providers include Softlayer, Equinix and RackSpace, which have ongoing operations with wholesale colocation operators.

But the tide is starting to change in the region. Google just announced its acquisition of 500 acres in Midlothian, in northwest Ellis County, with plans to spend over $500 million. Several major wholesale colocation operators are constructing larger facilities to cater to these cloud providers. It seems that the DFW region will start gaining many more looks as a logical site for hyperscale users.    


According to datacenterHawk, there is a “whopping 570 MW of additional capacity in the planning stages, indicating a strong expectation of growth.” The DFW region will continue to be a major player in the data center and colocation sector and will enjoy more than its share this robust growth.

Topics:Economic DevelopmentReal EstateData CenterSite Selection GroupSite SelectionLocation Advisory



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