Friday, October 16 2015
Ashburn, VA -- Equinix founders choosing in 1998 to build the company’s first data center in Ashburn, Virginia, may have been the best site-selection decision a data center company has ever made. Today, 17 years and half a million square feet of colocation space in the region later, Equinix is breaking ground on a brand new Ashburn campus that has the potential to grow to 1 million square feet of gross building space – a data center build-out that would cost $1 billion by the company’s estimate.
To say that Equinix founders chose Ashburn as the place to build their first data center is not entirely accurate. Rather, circumstances dictated that they build it there. Northern Virginia, the patch of American suburbia stretching west and south of Washington, DC, was home to some of the earliest facilities where carriers interconnected networks and provided access to the internet. The distributed internet exchange, MAE-East, was what brought Equinix to the region, kicking off the development of one of the world’s biggest data center markets.
Keystone Moment in Internet’s History
Carriers recognized that MAE-East, housed in five East Coast locations – three of them in Northern Virginia – had limited scalability and put out a request for proposals for a separate carrier-neutral building, where carriers would interconnect their networks and link to the long-haul internet backbones at MAE-East. The team behind Equinix won the contract to build that facility and formed the company around it.
Snowball Effect Drives Persistent Demand
The region is one of the oldest and most important interconnection points on the global map of the internet, which has had the snowball effect of attracting more and more players in the internet ecosystem. Because of that, demand for data center capacity in towns like Ashburn, Reston, Arlington, and Sterling has rarely slowed.
“The demand is every bit as strong as it has been, if not even getting stronger with increased enterprise cloud adoption,” Howard Horowitz, global head of real estate at Equinix, said. “It is still one of our top markets.”
The company has been adding a new data center in Northern Virginia every 18 to 24 months since it built its first facility there, he said, “and I don’t anticipate that changing.”
Its expansion has been far from incremental. DC1, which was about 40,000 square feet, was followed by the 150,000-square-foot DC2. Around the end of 2003 Equinix leased a building from DuPont Fabros next to its main campus to establish the 100,000-square-foot DC3, and so on.
The new campus will be called Ashburn North. It is less than one mile north of the original Equinix campus in town. The company’s plans call for five data center buildings on the 45-acre site, which it bought about two years ago.
Infrastructure work has already started, but Horwitz doesn’t anticipate Ashburn North to start offering capacity until at least 2017. Equinix has yet to build out the second phase at its DC11 building at Ashburn South, he said.
The Northern Virginia market has absorbed more than 30 MW of data center capacity so far this year, according to a recent report by the commercial real estate firm Jones Lang La Salle. It generated more demand than any other US market last year and is well on its way to doing the same in 2015, the JLL report said.
Examples of major deals in the region that closed this year were Facebook’s 7.4 MW lease with DuPont Fabros, Amazon’s 11.3 MW deal with Corporate Offices Property Trust, and InfoMart Data Centers stepping into the Northern Virginia market for the first time with a 5.4 MW build-out in a 180,000-square-foot building that used to house an AOL data center.
Internet’s Clustered Geography
In recent years, more data center capacity has been deployed in places far removed from those clusters. As internet users grow in number, and as businesses rely more and more on cloud services, there is a need for data center capacity in places where in the past companies could simply deliver their services over networks, without the need to store a lot of data locally.
But even with growth in those so-called “edge” data center markets, it’s hard to imagine a day when markets like Northern Virginia, where virtually every internet-oriented business that matters exchanges traffic, will lose their appeal.