How Cloud Demand Positively Impacts North Texas

Autonomous cars are already driving in parts of the U.S. Amazon uses drones to deliver some packages. The Internet of Things will soon connect every appliance, device and electric gadget in our homes to the outside world. What do all those once-futuristic things have in common? They require the cloud. 

As one of the top four data center markets in the world (and the top market by commissioned power), Dallas-Fort Worth is poised for even more growth over the coming years as cloud demand increases.

A Cisco study last May found that in the next three years, 83% of all data center traffic would be based in the cloud. Cisco’s data also found that by 2019, more than 500 zettabytes will be generated, which is about five times as much data as was generated in 2014. That is being driven by 34 billion connected devices. 

In a not-so-distant world where coffee makers will alert Amazon when they are out of beans, order and ship said beans to be delivered via drone, demand for data will only increase. 

“The demand for data per person, our consumption in GB keeps going up every year,” Skybox managing partner Rob Morris said. “Even with a population decrease, it would have to be substantial to decrease data demand.” 

Morris said the paradigm is shifting in how cloud companies and Fortune 500s choose to locate their data needs and how consumers choose to consume that data. Developers traditionally not focused on data center projects, like Hillwood, have taken notice.

After selling 150 acres to Facebook to build a $1B data center at AllianceTexas, Hillwood has mapped out an additional 300 or 400 acres north of the Facebook site that have all the infrastructure needed to become a data center park. Hillwood vice president Reid Goetz said that could result in 200 to 300 MW of new supply at build-out.

Increased cloud demand drives more data center development. Skybox recently delivered Skybox Legacy One, a purpose-built, 25 MW mission critical facility that has 150k SF of hardened powered shell.

Supply in North Texas is constrained, but it will loosen between Q3 2017 and Q1 2018 when RagingWire, Digital Realty, ViaWest and Stream deliver product, according to a January report by JLL.

Thanks to North Texas’ low electricity costs, central location, tax incentives, population growth and low instances of natural disasters, this area remains attractive to future data center developments.

Corporate growth drives data center need, Goetz said. Companies want to be close to their data — though not quite so close as a data center closet within their offices. Cloud footprints reside where people reside, Morris said. 

The closer you can get to populations, the better performance becomes, Goetz said. This can impact office product in multiple ways.

As offices try to pack more people into less space, emptying basements and closets previously housing computers can be an easy way to make more room. Plus, cloud demand brings higher focus and attention to office and building design, Goetz said.

When offices must provide better technology, fiber capabilities, redundancy and connectivity, building design must support that. Such connectivity allows more employees to work remotely more often.

And when the number of remote workers rises, tenants could require less parking. On paper you may need five parking spaces per 1k SF of office, but when more employees work from home for full or half days, parking needs decrease, Goetz said.