North Carolina Emerges as Data Center Hub

November 17th, 2010 : Rich Miller, Data Center Knowledge

Economic development officials in rural North Carolina are cheering an unusual data center trifecta – winning huge data center projects by Google, Apple and Facebook. Each of the three marquee tech companies chose North Carolina after extensive, multi-state site searches, won over by the state’s combination of affordable power and tax incentives. The projects will bring more than $2 billion in investment to small rural towns.

You might things couldn’t get any better for the data center corridor in western North Carolina. But they almost did. This past summer a site in Cleveland County was a finalist in a site search by Microsoft, which eventually chose to build a $499 million data center in Boydton, Virginia.

Despite that near miss, North Carolina officials have plenty to cheer about, and believe this is just the beginning of a major data center cluster. “Now you’ve got three of the most recognized technology companies in the world here,” said Scott Millar, the director of economic development for Catawba County. “I think it really establishes the corridor. With these companies here, any company doing a data center site search will certainly want to consider this area.”

North Carolina has always had data centers in the Raleigh/Durham area, which is home to Research Triangle Park and data centers for companies including IBM, NetApp, Ralph Lauren, Peak 10, Hosted Solutions and DataChambers.

But things were far quieter in the western part of the state. The region was once a thriving area for textile mills. Many of these mills have departed or closed, leaving behind industrial-strength power and water infrastructure that’s ideally suited for data center development. Duke Energy’s power rates are competitive, with industrial electricity rates at about 5 cents per kilowatt hour. State and local governments have been generous with offers of tax incentives, which have been a key factor in winning major deals. Here’s a recap:

•In early 2007 Google announced plans to build a $600 million data center in Lenoir, a town of 17,000 residents in Caldwell County.
•In 2009 Apple chose the small town of Maiden (population 3,300) in Catawba County for a $1 billion data center campus.
•On Nov. 11, Facebook unveiled plans to invest $450 million in a new data center facility in Forest City (pop. 7,500) in Rutherford County.
•On Monday, Wipro Infocrossing confirmed plans to build a $75 million data center in Kings Mountain in Cleveland County, which has about 10,000 residents.
Developers marketing properties in Cleveland, Catawba, Caldwell and Rutherford counties say they’re seeing continuing interest from data center site location consultants and end users.

“We’ve had tremendous activity,” said Pete Marin, the President of developer T5 Partners. “There’s a large number of big projects. We’re seeing requirements from 5 megawatts to 70 megawatts.”

T5 is a data center development company led by former data center specialists with The Staubach Company. The company is focusing on North Carolina, and marketing multiple sites for major end users. T5 is currently building a second data center at its Kings Mountain campus (where Wipro leased its first building) and also has a site in Maiden that has attracted interest. Five 9s Digital is also marketing multiple sites in the region, as are county officials.

Catawba County created DataCemterSites.com to market to the data center sector. Millar began targeting his economic development efforts to the data center industry five years ago, attending industry conferences and hosting an annual Data Center Information Exchange event for data center site selection specialists. The first event five years ago attracted eight consultants. By this year, the event had grown to 50 participants.

The success of western North Carolina demonstrates the evolution of the data center marketplace, where major facilities were historically clustered in bandwidth hubs like northern Virginia and Silicon Valley.

“There will be new markets that emerge,” said Marin. “These 50 megawatt requirements will forge the new frontier.”