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In the digital age, data centers have emerged as pivotal components for businesses. One region that has surfaced as a critical player in this arena is Texas. Data centers in Texas are increasingly appealing to businesses across various sectors. This article delves into why Texas is becoming a prime spot for companies to benefit from data center colocation and what unique advantages the state provides.

Texas: The New Frontier for Colocation Data Centers

Texas led the nation in new technology job creation in 2022. Colocation data centers are expanding in Texas, as well. Over 300 data centers call the state home. In fact, if Texas was its own country, it would have the sixth most data centers, just behind Canada.

The attraction of a Texas data center is the unique combination of affordability, advanced infrastructure, and the state’s geographical advantages.

Business-Friendly Environment

Texas stands out as a robust platform for data center colocation because of its business-friendly environment, competitive pricing, low taxes, and streamlined regulations. These factors make Texas an attractive destination for companies aiming to minimize operational costs without compromising quality or efficiency.

Unique and Reliable Power Grid

A significant advantage offered by Texas is its unique power grid. Unlike most states, Texas operates its own electrical grid, managed by the Electric Reliability Council of Texas (ERCOT). This unique setup provides a certain level of independence and flexibility in energy management. ERCOT’s main role is to maintain the reliability of the Texas electrical grid, which translates into a highly stable power supply for data centers, minimizing potential downtime due to power outages.

The Texas power grid is expected to experience tremendous growth. According to Cushman & Wakefield’s 2024 report, the market is expected to grow by over 25,000 Megawatts. This represents the largest growth in capacity for any US market.

Affordable Power

Furthermore, Texas boasts some of the most affordable power rates in the country. Texas operates one of the largest deregulated energy markets in the U.S. In this competitive marketplace, consumers (including data centers) can choose their electricity provider from many options. This competition among providers drives prices down, making electricity more affordable.

Texas has a wealth of natural resources, including oil, natural gas, and wind, making it one of the leading energy producers in the United States. This vast supply of energy resources allows Texas to be relatively independent regarding energy production, which can translate to lower costs.

Texas is also the leading state in wind energy production, rapidly expanding its solar energy capacity. Renewable energy, particularly wind power, can be a cheaper source of electricity. As Texas continues to invest in and grow its renewable energy sources, it can continue to drive down energy costs.

As power consumption is one of the significant operational costs of running a data center, the affordable power rates in Texas can lead to cheaper colocation services.

Low Risk of Natural Disasters

Another unique advantage Texas offers is its relatively low risk of natural disasters. Unlike states prone to earthquakes or hurricanes like California and Florida, Texas provides a stable environment that mitigates potential risks associated with data loss or damage. This inherent geographical advantage boosts the appeal of Texas colocation data centers, providing businesses with an additional layer of assurance.

Advanced Connectivity Infrastructure

Lastly, Texas’ burgeoning tech industry has led to a proliferation of high-speed fiber networks throughout the state. This extensive connectivity infrastructure facilitates fast and reliable data transmission, reducing latency and enhancing the user experience.

Texas has attracted several major telecommunications companies, each contributing to the state’s expansive fiber optic network. For instance, AT&T, headquartered in Dallas, has been a significant player in expanding high-speed internet nationwide. Google Fiber, which provides ultra-fast broadband internet service, has also made inroads in Texas, currently serving Austin, San Antonio, and the outskirts of Houston.

Key Markets for a Texas Data Center

Customers exploring data centers in Texas have several major markets to choose from. Let’s explore them here.

Dallas Fort Worth: The Tech Boom City

In the heart of the Texas tech boom is Dallas. Cushman & Wakefield ranked Dallas as the #9 data center market globally by size. Recognized for its rich pool of IT talent and robust fiber connectivity, Dallas is a strategic location for data center operations. Dallas data centers offers a broad network of service providers and a conducive environment for business expansion and fosters a tech-forward culture that stimulates innovation.

The city features the Dallas Infomart. This 1.5 million square foot campus owned by Equinix is the largest internet exchange in the region and central hub for global connectivity. The Dallas Fort Worth area is also home to all five major US cloud service providers (Amazon, Azure, IBM, Google, and Oracle), making it the largest hub for cloud services in the South Central United States.

Austin: The Innovation Capital

Austin, the state capital, is fast becoming a tech hotspot and is one of the fastest-growing data center markets in the country. The city’s dedication to innovation rivals Silicon Valley and is reflected in its robust fiber optic connectivity. Over 130,000 miles of fiber optic network cables connect the city, making it an outstanding location for colocation services.

Austin’s average cost of electricity is 47% lower than the national average, and 11% lower than the average in Texas. The city’s commitment to renewable energy further drives down the cost of colocation services, making Austin an affordable and sustainable choice for enterprises to locate their data centers.

Houston: The Energy City

Houston, renowned as the world’s energy capital, extends its energy leadership to the digital arena. Data centers in Houston benefit from the city’s vast energy resources, ensuring a stable and reliable power supply. Data centers operators in Houston also benefit from lower energy costs.

Houston is a leader in network connectivity. It serves as a strategic gateway to the from the South Central to South East United States, connecting markets like Atlanta and Miami. The city is also home to the Houston Internet Exchange (HOUIX), a free, multilateral peering exchange.

San Antonio: The Cyber City

San Antonio, fondly called the “Cyber City,” is known for its robust cybersecurity infrastructure. The city has power rates that are 36% lower than the national average. In addition, the city’s strategic location makes it an ideal environment for disaster recovery and business continuity services.

San Antonio is served by multiple internet exchanges (SAT-IX and FD-IX), as well as cloud service providers (Azure and Google). It is also ranked by WalletHub as the safest city in Texas for natural disasters, crime, and financial risk.

Conclusion

Choosing Texas for data center colocation offers a myriad of benefits. The combination of a business-friendly environment, affordable power, an independent and reliable power grid, a relatively low risk of natural disasters, and advanced connectivity infrastructure make Texas a compelling choice for data center colocation. From the tech-savvy Dallas and innovative Austin to the energy-rich Houston and cyber-secure San Antonio, businesses can find a Texas data center that perfectly aligns with their unique requirements. As the digital landscape evolves, Texas colocation data centers are well-positioned to support companies in their journey toward growth, resilience, and digital transformation.

Brightlio Delivers Texas Colocation Services

If you are exploring data centers in Texas, Brightlio can help. As a telecommunications and colocation broker, we have data center partners across the state that will deliver solutions that meet your needs and budget. Provide us with space, power, and connectivity requirements, and we’ll deliver colocation pricing at no cost.

Additionally, we offer connectivity, unified communications, cloud, and advisory services. Our complete service offering allows us to deliver a holistic technology solution for your business.

Get started with Brightlio today!

If you enjoyed this article, check out our guides to colocation in other states:

• California Data Centers: Brightlio’s Ultimate Guide to Colocation in the Golden State
• Data Centers in Connecticut: Six Reasons to Colocate in the Constitution State
• Data Centers in Florida: Colocation in the Sunshine State
• The Iowa Data Center Market: Colocation In America’s Heartland
• Data Centers in Massachusetts: Six Reasons to Colocate in the Bay State
• Data Centers in Maryland: Innovation in The Old Line State
• New Jersey Data Centers: Powering the Digital Future of the Garden State
• Data Centers in New York: The Gateway to Colocation in the Empire State
• Data Centers in Oregon: 5 Reasons to Colocate in the Pacific Northwest
• The Ohio Data Center Advantage
• Data Centers in Northern Virginia: Brightlio’s Guide to Colocation in the Mid-Atlantic