The Southeastern U.S. is known for its mild climate, comforting down-home cuisine, and southern hospitality. Recently, however, this region has been expanding its repertoire to encompass a new facet of the technological future: data centers. Emerging markets like Birmingham, Alabama, have begun to crop up throughout the Southeast, and fast-growing secondary markets, such as Atlanta, continue to gain traction and attract growing investment within the data center sphere.

The vital site selection process for data center entities encompasses a wide range of variables, including market size and growth rate, competition, power and real estate costs, and fiber network infrastructure availability. Nowadays, a growing number of businesses within the data center sphere are pinpointing the Southeast as an up-and-coming locale due to its ability to fulfill a myriad of requirements.

A Regional Overview

The cost of living, weather, resource availability, labor pool, low taxes, and real estate prices are just a few benefits that this area boasts for data center development. Furthermore, technology and innovation enablers are finding their homes throughout the Southeastern U.S., creating footholds for technological opportunity to flourish. The “Gig City” in Chattanooga and ChaTech, Greenville’s accelerating growth in business creation, Tech Birmingham and the Innovation Depot, and Huntsville’s jaw-dropping number of PhDs are just a few examples of this impressive and expanding technological prowess. Last year, Alabama also scored two major data center investments, including one from Facebook, which announced a $750 million data center in Huntsville, and Google, which kicked off construction on a $600 million data center in Bridgeport.
The Southeast’s common themes are a strong propensity for growth (Forbes has predicted that the region’s GDP will jump from $2.4 trillion in 2013 to $3.1 trillion in 2023), a business-friendly climate, and access to tech-savvy talent from world-class research institutions like Clemson, Vanderbilt, University of Florida, Auburn University, Georgia Tech, and more. Plus, electricity rates per kilowatt hour in the region are very cost-effective when compared to locations such as California or New York. All of these attributes come together to present a winning combination for data centers.

Growing Markets, Critical Gaps

Regardless of size and location, markets have relatively similar concerns across the board. Security, multi and hybrid cloud deployments, increasingly distributed IT infrastructure, reliability, and cost efficiency are all IT challenges that entities face as they look toward the future and at their own day-to-day operations. However, the area in which underserved markets differ from major metropolitan areas is their inability to support and meet these requirements. Until recently, smaller markets have lacked a local data center facility with rich connectivity and have either had to deploy lower-quality facilities, drive to the major metropolitan areas for quality services, or defer initiatives due to the lack of local infrastructure.
One example of this phenomenon is in Birmingham. Birmingham is a growing hub for technology, but it had a critical gap in its capabilities as the largest city in America that still lacked a purpose-built, high-security, multi-tenant data center. Many local and state governments across the Southeast are eager to facilitate new infrastructure being built in their respective markets, lending a unique and advantageous investment dynamic when compared to major metropolitan areas.

Proximity Is King

With the growth of 5G and the IoT pushing the boundaries of capacity and latency, the new focus for the data center industry is proximity to the end user. The undeniable need to move data processing closer to where it’s created and consumed is encouraging more state and local governments to recognize the value of data centers and create strong incentive programs. The Southeast offers data centers the benefit of being closer to the proverbial edge, giving consumers improved experiences with decreased latency, reduced congestion, and high-performance interconnections.

The Trend Continues

The momentum that the Southeast is gaining in the data center market shows no signs of slowing. With benefits abounding, the region offers much to potential data center investors by way of friendly business environments, lower costs, access to talent, and the promise of growth. As it stands, the Southeast is sure to increase its eminence as it becomes the newest home to data centers that power the connected future.