Loudoun County’s data center market continues to surge
By this time next year, Loudoun County could house more than 100 data centers.
“The data center industry has been so important to Loudoun County,” said Buddy Rizer, the director of economic development for Loudoun County. “It's been really one of the big drivers that has allowed us to do what we need to do as a growing community. It's $150 million or more in local tax revenue. As we've gone through our growth we've seen that most of the easily identifiable spots are pretty much spoken for. We want to balance the fact that we want them in certain places where they have a minimal effect on our residents.”
This is mind, the department recently undertook a deeper dive into land parcels that may not have been obvious first time around. Now, those sites have been identified. Discussions were had with landowners and potential sites were assessed to see if they had the right resources, such as making sure they have the right power capacity and appropriate zoning. On the back of this exploration exercise, a total of 43 new sites were earmarked as suitable for data center development. The number of data centers operating in Loudoun County to date stands at 70.
Data roots run deep
Loudoun has been known as the king of data centers for some time now. The 1990s was when the “dot com” bubble started to inflate, and AOL established its Dulles campus in the second half of the decade. Major telecommunication companies relocated operations from Tysons Corner as more internet traffic meant a need for more space. One Loudoun site, known as MAE East, became a nerve center for all east coast internet communications, acting like a doorway to the internet.
The groundbreaking ceremony for the now infamous WorldCom took place in 1998 in an Ashburn farm field. At the time it was the nation's second-largest communications company. WorldCom also owned UUNET, which formed a major part of the backbone of the expanding internet. WorldCom built a huge campus on a 590-acre site along the road that is now Loudoun County Parkway. It employed more than 3,500 people, acquiring and merging its way to becoming a telecom and internet powerhouse with billions of dollars worth of assets. Miles of fiber were laid underground, extending internet lines to the world from Loudoun County. Then Gov. James. S. Gilmore (R) nicknamed Virginia, the “Silicon Dominion.” Today, the corridor commonly known as “Data Center Alley.”
But the glory days were not to last. A few years later, WorldCom-MCI, the largest merger in U.S corporate history ended in the largest bankruptcy in U.S history. And things would only get worse. The tech bubble burst worldwide, and a recession hit the “Silicon Dominion,” a trend felt across the globe.
Ten years ago the green shoots of recovery began to be seen. Loudoun County economic development officials began trying to attract data centers, with the first three were set up in empty buildings.
“There hasn't been a day without data center construction here in Loudoun County for the best part of the last decade,” Rizer said. “It's driving the construction industry, it's driving the technology industry, it's driving the 3,000 technology companies that are inside our data centers.”
Major players eye Loudoun
Of the 43 new sites identified as ripe for data center development, a several have contracts according to Rizer, who said he's confident the rest will go to market by spring time.
“We've actually closed a couple of deals we will be announcing soon that will start building this spring,” he said.
The international data center market has its eyes on Loudoun. Rizer said they are working with a German company and a few others. "It's an important thing for these companies to make sure they are all competing on the same playing field," he said.
“We think we are still the best data center market in the world,” said Rizer. “We are not the cheapest, but we still have the best infrastructure. We have the best time to market. We have the best workforce. We have great power from a price stand point and a reliability stand point.”
Rizer wouldn't confirm if any household-name companies are planning to locate in Loudoun, saying there are a number of non-disclosure agreements in place. But, he added, “you point to a major internet company, they are either here or looking to be here.”
The county is no stranger to attracting big names. Amazon Web Services operates data centers out of Northern Virginia, first setting up shop here in 2006. Vadata Inc is Amazon’s subsidiary company for anything data-center orientated. They have addresses in Sterling and Ashburn.
Loudoun County's economic development department notes that 70 percent of the world's internet traffic travels through Loudoun County each day. A significant portion of that traffic is believed to be from Amazon Web Services. The once-troubled MCI still operates here, though it's now a subsidiary of Verizon. It runs its Network Operations Center and Government Operations Center at the former WorldCom campus.
As for 2017, the latest round of construction is driven by cloud expansion.
“The major cloud players are all trying to stake out their territory,” Rizer told the Times-Mirror. “It's become a cloud war out there. Everyone is trying to battle for their part of the market and much of that battle is being fought right here in Loudoun County.”
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