For Data Centers, Opportunity Lies In Florida

The number of people who move into Florida each year is about equal to the population of Orlando, said Landmark Dividend Senior Vice President and Chief Technology Officer John Regan, speaking on a Bisnow webinar about South Florida data centers on April 22. Most of those roughly 500,000 new residents use computers and smartphones.

“If every one of them carries 10 gigabytes worth of data, that's five petabytes [million gigabytes] worth of data that's added on an annual basis, and if it's more than 10 gigabytes that they're bringing along with them — you know it's 100 gigabytes on average — then, you know, it just makes that equation even larger," Regan said. "So I think that represents a major opportunity, and that's just the data component.”

Experts discussed how the increase in computing would in turn affect real estate. With each new resident comes additional pressure on telecommunications systems and power grids. There will be increased demand for 5G cell towers, fiber optic cables that run underground and across oceans, and edge computing — with equipment located near end users, rather than at a centralized location thousands of miles away.

“This is not a couple of years' worth of work," InterGlobix President Vinay Nagpal said. "To build an ecosystem like this is extremely tough — to have various parts of the network ecosystem."

QTS Vice President of Innovation David McCall referred to the fact that while data travels short distances between cellphones and towers, it still largely moves along physical fiber optic cables, too.

“The effective range of 5G is about 1,000 feet,” he said. “At the end of that, you need fiber infrastructure. It still doesn't penetrate buildings yet.”

QTS owns a data center in Miami that can resist a Category 5 hurricane. McCall said that his average customer is small or midsized, and that increasingly, clients are saying, “We don't just want a data center that's fast. We want one that's sustainable, has renewable energy, has a green policy, etc.”

"Your cloud offering is only as good as your fiber connectivity,” 365 Data Centers CEO Bob DeSantis said.

Just a few years ago, DeSantis said, the main providers of internet services were AT&T and Comcast, but they are highly regulated and slow to change, which has created an opening for more agile players.

EdgeConneX Chief Marketing Officer Phillip Marangella said that his company has two data centers in Miami, plus one in Jacksonville and one in Tallahassee, and is growing in South America.

He said computing infrastructure must be able to handle traffic that flows two ways. “Thanks to TikTok, right?” he asked.

“Covid has made our homes the new edge, right?" Marangella said. "We are all working, streaming. My son's gaming and studying, and you're exercising, shopping more than ever, and this is putting a burden on the networks, and you're getting these bottlenecks at the edge. That's the role that these data centers have throughout all these edge markets — to alleviate those bottlenecks and smartly route that traffic where you have peering.”

South Reach Networks President Michael Sevret said his company owns and operates both 400 miles of fiber optic cable and a data center in Miami, and edge facilities from West Palm Beach to St. Augustine.

“In St. Augustine and Fort Pierce and what have you — those areas are now being so built out from a geographic standpoint in real estate, that those facilities are now pretty prominent for not only edge, for tower operators and 5G and what have you, but also could be a great home base for municipalities — utilities, government and enterprise — that just want to offload some of their servers and some of their back office.”

DataSite President and founder Jeff Burges opened his company's largest data center in Orlando.

“It's a site we bought from AT&T back in 2004 during a time when I was buying empty data centers amid the smoldering embers of the dot-bomb, and believing very adamantly that they were gems for the future," Burges said. "We opened that site in 2009.”

“We really do believe that Florida is the greatest edge opportunity in the United States, in the next five to seven years, without question,” Burges said. “I think there's room for more. And I think it's untapped potential, everybody — really untapped … I see all boats rising in the tide."

Ascenty CEO Chris Torto just opened an office in Miami. Ascenty is Latin America’s largest data center provider, with facilities in Mexico City; Santiago, Chile; and Sao Paulo, Brazil.

“You’ve got to be close to the fiber network and close to power infrastructure,” he said. “We typically build anywhere from 200K to 400K SF, and we need 40 to 50 megawatts of total power.”

Keyser Practice Leader for Digital Infrastructure Solutions Michael Ortiz said that Florida had long been ignored by infrastructure companies because of the risk of hurricanes, but with 14 deep-water ports and 20 commercial airports, it’s the gateway to Latin America, which is poised to have explosive growth in internet usage.

“In North America, we’re at plus or minus 89% penetration rate,” Ortiz said. “In Central America, we're about 68% to 75% penetration rate. And then when we start getting into South America, we're at about 72% to 70% penetration.”

He said he read a Verizon report estimating that the impact of 5G to Florida alone will be $75B. He imagined all the kids who'd be downloading Fortnite.

"Three gigabytes over a cellular network is 24 seconds, as opposed to 14 minutes on 4G. Huge difference," he said. "There's so many compelling reasons why Florida is so well-positioned and truly gold.”