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