Why Data Centers are Growing in Houston

Explosive growth in healthcare and oil and gas is driving data center development, says JLL managing director Bo Bond. He gave us the skinny on why you might see one pop up on your corner. (You can go out for groceries, a haircut, and maybe grab a terrabyte with some friends.)

Bo (here with his 6-year-old son, Jackson, at Rangers opening day) tells us healthcare in particular is a big data user—new regulations and digitization of medical records is upping usage. (Your allergies are creating jobs.) Multiply that across the largest medical center in the world, and you’re talking a lot of gigabytes. But we’re really looking at broad-based expansion—Bo says he’s a firm believer that job growth and commercial development (hey, we’ve got a ton of both!) drive data center growth.

Bo (here with his family in Puerto Rico) says users are broadly adopting colocation, cloud, and managed services, turning toward the multi-tenant data center market and away from first-party ownership to gain agility and free up resources. As a result, the use of sale-leaseback agreements is gaining traction while build-to-suit activity declines. Third-party providers like CyrusOne, Digital Realty Trust, and Data Foundry have been busy here lately responding to growing demand with hybrid offerings that allow users to scale up or down as needed. By shedding the maintenance requirements of first-party ownership, IT departments gain the capacity for greater innovation.