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The amount of data we generate has risen significantly over the last decade, hence the rising demand for cloud services and data centers in tech-enabled environments like Dallas. As more companies require secure data storage facilities, we’ve seen a rise in the development of colocation centers, with data centers in Dallas proliferating. 

Colocation centers allow you to colocate and manage crucial technology infrastructure without the attending costs of purchasing enterprise-level power, cooling, and security technology. In addition, you can easily outsource your data hosting needs to colocation facilities that are purpose-built for data center infrastructure.

Whether you run a large or small business, colocation provides significant advantages. In this article, we take a deep dive into the different conditions that make Dallas data centers a viable option for your business.

Here are some variables to consider before you rent a new colocation center for your business:

• The cost of space and power
• Redundancy and backup systems for critical power and cooling infrastructure
• Network connectivity options
• Public cloud availability and cloud on-ramps
• State and municipal taxes
• Environmental risks that affect the building’s location
• Economic and business sustainability of the city
• Availability of skilled labor and development pipeline
• Taxes and other business incentives
• The reputation of the colocation center
• The political stability of the area

Dallas ranks among the top ten cities in the United States for colocation. With a wealth of data center options in Dallas, you can find a colocation facility that meets your requirements and budget.

Here are seven reasons why colocation centers in Dallas may be a perfect fit for your business.

1. Power Costs in Dallas Are Lower Than the National Average

Texas is the only state not connected to the national grids that serve the eastern and western United States. As a result, Texas produces electricity consumed within the state without oversight from the Federal Power Commission. The state of Texas also has an abundance of natural power sources that reduce power costs. As power is one of the biggest expenses for colocation, this can add up to meaningful savings for your business.

Dallas’s electricity cost per watt is relatively low, making it much more affordable compared to other popular regions for colocation, like Northern California and Virginia. Compared to the US business electricity cost average of 13.45 cents per kWh, business power cost in Dallas averages 9.72 cents per kWh. As power is one of the most important cost drivers for colocation services, the lower cost of power helps drive down colocation pricing in Dallas.In addition, by introducing a competitive electricity generation and supply market, power companies in Dallas are incentivized to reduce power expenses. This competition lowers the cost of energy in Dallas, thus lowering the cost of colocation.

In pursuit of renewable and sustainable power generation, Texas has a natural supply of gas that allows the state to support data centers. Because a lot of energy generation options exist in Dallas, data centers have a variety of reliable options to choose from. This lowers the cost for power and provides backup options in the event of a grid failure.

2. Dallas Is a Highly Tech-Enabled Landscape

Dallas has positioned itself as a city with access to major cloud service providers. Both Google Cloud and IBM Cloud have availability zones in Dallas. This tech-enabled environment makes it the perfect hub to promote the emergence of data centers. 

With numerous big tech corporations like Texas Instruments and Verizon calling Dallas home, you can easily find skilled and knowledgeable IT staff to hire for your data requirements. As a result, this city attracts all kinds of top talents that can efficiently manage and service data center infrastructure.

There are also technical advantages to the Texas power grid. Many data centers are located in Dallas because the power isolation system protects them from outage problems affecting other national grids. With recent governmental reform, the Electric Reliability Council of Texas (ERCOT) protects against extreme weather conditions by penalizing power providers that do not protect their stations against severe weather. This policy incentivizes power supply companies to protect against circumstances that may affect reliable power supply.

3. Dallas Has an Abundance of Colocation Centers

Dallas is home to numerous data centers because it provides all the resources they need to thrive. With reliable fiber infrastructure and robust electricity, more and more colocation facilities spring up annually within the city. The Dallas colocation industry is the third largest in the United States, just behind Silicon Valley and Northern Virginia.

Many business choose to have their headquarters in Dallas. These corporations need data center space, creating a bubbling ecosystem of data centers and related services.

Dallas is home to 140 data centers with hundreds of megawatts of commissioned power. Many of the colocation facilities in the city populate the downtown area of Dallas, including DeSoto, Midlothian, Red Oak, and Wilmer. 

The abundance of colocation service providers gives you a variety to choose from in an area specifically designed to provide reliable support. Over 40 multi-tenant colocation centers offer retail colocation services to businesses.

4. Dallas Has Fantastic Internet Connectivity and Network Infrastructure

Fiber infrastructure in Dallas is robust, with extensive interconnectivity and high bandwidth access. With multi-national telecommunication companies operating in the area, colocation customers have a variety of network providers to choose from. 

Top telecom companies in the city include Logix, CenturyLink, Sprint, Verizon, and EarthLink. As such, data centers in Dallas can easily connect to AWS, Google, Azure, and other essential partners via a robust carrier system.

With a central location in the middle of the US, colocating in Dallas also allows you to service customers in strategic markets like Austin, Atlanta, Denver, Phoenix, Salt Lake City, Los Angeles, and San Diego. You can also service customers with relatively low latency in Mexico and other parts of Latin America.

5. Dallas Enables Business Scalability 

Dallas ranks well below other US metropolitan cities when it comes to the cost of running a business. The costs of labor and rent are especially low. Texas has over 120 financial incentives and favorable regulatory policies that allow businesses to thrive.

Dallas also has one of the largest concentrations of corporate headquarters, with over 20 Fortune 500 companies calling Dallas home. This concentration means a constant demand for data centers. The impending competition makes Dallas the perfect city to find affordable colocation services for your business.

With two major international airports, Dallas presents a massive opportunity for new businesses, providing an incentive for favorable regulation and tax breaks. Moreover, for companies interested in tapping into a large pool of highly skilled labor, Dallas provides the perfect opportunity as the city is a magnet for diverse tech-related skills. 

6. Dallas Has an Abundance of Affordable Real Estate 

Since early 2021, there has been an exodus of tech companies from Silicon Valley, California, due to a rise in housing costs and other issues. Many CEOs opt to relocate to Dallas due to lower real estate prices. Real estate prices in Dallas are around 8% cheaper than the national average. This makes the city very attractive for companies seeking and providing colocation services. 

Due to weather concerns and natural disasters, many buildings in Dallas are constructed in line with national building codes to withstand high winds. This building standard provides additional security and safety for many colocation centers within the city.

7. Dallas Offers Lucrative Tax Incentives for IT

Significant tax breaks exist for colocation centers in Dallas, allowing corporations to save millions of dollars in expenses annually. In 2013, Texas legislators passed a bill that eliminated taxes on qualifying hardware and software purchases for data centers. This tax break allows companies like yours to reduce costs and channel resources to other pressing business needs.

Data center occupants are 100% exempt from paying the 6.25% state sales for up to fifteen years on their electricity consumption and equipment. You can enjoy tax breaks on purchasing servers, storage devices, generators, cooling systems, and software. These breaks are part of the reason why many data centers spring up in Dallas, giving your business a variety of options to choose from.

As a central location in the US, this city connects the US and Latin America, attracting many international companies that incentivize legislators to develop favorable regulations that support growing businesses.

The Bottom Line: How Brightlio Can Help With Dallas Colocation

If you’re in the market for colocation services, Dallas, Texas might be right for you. Dallas is a growing tech hub that provides reliable and affordable power supply, robust fiber connectivity, and favorable tax incentives.

If you are interested in learning more about colocation in Dallas, or other locations, Brightlio can help. Our global network of colocation providers means we have the right partner for your needs and budget. We offer services from single server colocation to dedicated racks, cabinets, cages, and suites. As a telecommunication broker, our services are free to you.

Brightlio is also leading provider of network connectivity, unified communications, cloud-on ramps, and public cloud services. Our service portfolio makes us the perfect partner for all your technology requirements.

Contact Brightlio today!