No, this isn’t another article on cooling solutions. This issue we’re going to talk about hot locations for new data center installations and how they got so hot.

Over the last decade, a few select regions saw several years of intense data center build-outs. A few of these locations include:

  • GA: Atlanta, Alpharetta, Norcross, and Suwanee
  • TX: Austin, Dallas, and San Antonio
  • CA: San Francisco Bay area from San Jose to Oakland
  • WA: Quincy
  • IL: Chicago
  • MA: Boston Metro
  • VA: Culpeper, Prince William, and Spotsylvania counties

Many of these locations gained recognition for landing a large mega data center. For instance, Microsoft and Google put Quincy, on the map. The Virginia counties, however, experienced a more sustained and diversified growth. Although each region has its own success stories, incentives, power costs, power availability, fiber connectivity, and location made them attractive to data center owners.

Like any other market, the data center market continues to evolve. Areas like Northern California, Dallas-Ft. Worth, and Virginia will likely remain attractive data center locations, but other markets have already developed strong followings and will become the next hot spots.

North Carolina, for instance, has developed a steady base of installations over the years. When the economy began to drop, its government took note of the state’s many assets and began an aggressive campaign to attract data centers. Research Triangle Park in the Raleigh/Durham area, as an established financial center in Charlotte, and Greensboro, as a crossroads, gives this state much to offer. There is a large well-educated population, the cost of living is relatively low, and it has a desirable climate.

What else makes North Carolina stand out? Well-organized economic development groups have honed their skills and work with state and local governments to offer a package of business incentives that that can compete with most any other state. The development groups have been careful to keep the packages balanced to ensure an adequate return to the state.

Next is utility service and cost. Duke Power is probably the most cooperative utility company a large power user could want. They are thoroughly involved with the process and are willing to commit to a delivery early in the planning stages. What’s more, the company provides ample low-cost power. In addition nearly every major fiber provider has a presence in the state.

Last, for those clients who do not have the time to build a greenfield site, Raleigh, Charlotte, and Greensboro have a significant number of large footprint warehouse and manufacturing facilities awaiting conversion. Many of these already have power onsite.

At last count, I have identified more than 18 active data center searches focused in the North Carolina area.

New York State (NYS) is another hot spot to watch. The financial services industry has for years made hefty data center investments in New York City and some surrounding suburbs. Today, the state sees that many of these data center owners no longer need to expand in a high-cost city environment. To keep these investments in the state, New York has started an aggressive campaign to convince both existing businesses and out-of-state firms to locate back office facilities upstate. Upstate New York includes many sites that offer lower operating costs compared to the metropolitan area, excellent free-cooling climates, and significant fiber connectivity.

Data center owners can also benefit from New York’s approach to energy efficiency in addition to support from the Empire State Development group and the New York State Power Authority. The New York State Energy Research and Development Authority (NYSERDA) is a public benefit corporation that administers the state’s systems benefit charge. One NYSERDA program provides incentives that have motivated more than 30 energy-efficient data centers to enroll. NYSERDA’s program is performance based.

These are just two hot spots around the country. Some industry leaders helped me identify other hot areas. Jerry Reich, a managing director at CB Richard Ellis, confirms that market activity in North Carolina and Virginia remains strong. He is also seeing increased interest in northern range states such as the Dakotas, Ohio, and Nebraska. He attributes this new development to expansion of acceptable ranges to capture free cooling along with low utility cost and improved connectivity,

William J. Moser, SVP, Mid-Atlantic Practice Leader, National Data Center Group at Grubb & Ellis Company, states that the Virginia region has consistently seen 6-9 megawatts of pending wholesale lease transactions per quarter for that last couple of years, and that it continues to remain strong as it has signed approximately 9 megawatts of wholesale leases over the last three months ending February 2010.

Patrick Lynch, senior director, National Data Center Group at Grubb & Ellis Company, sees the Rocky Mountain area as up and coming. The area of interest spans from Cheyenne, WY, to Colorado Springs, CO. Advantages include strong fiber connectivity options, strong work force, availability of free cooling given relatively cool temperatures, and low humidity levels.

Jason Chartrand, executive vice president of T5 Partners, LLC, calls North Carolina and Des Moines, IA, markets areas of high activity.

There is certainly more activity than this. What do you think are the next hot spots? Email the editor at or comment on this article at www.mis to tell us why.

For more on North Carolina, contact Daniel A. Lynch, president, Greensboro Economic Development Alliance, 342 N. Elm Street, Greensboro, NC 27401, (336)387-8310

For more on New York State, contact: Scott Smith, NYSERDA, senior project manager 518-862-1090 x 3344