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 Feature Industry Articles 
Thursday, January 10 2019
A Site Selector's Perspective to Profit from Your Data Center!

By Angelos Angelou, Founder & CEO, AngelouEconomics,

In real estate, it’s about: “Location, Location, Location!” Location matters – no really, it does!  When the data amount is region-specific, it is important to have data centers off-site in the areas when needed. It is also a great option for driving down costs coming from being away from a major data hub such as those in cities. This is more than just choosing a data center closest to the customer’s business operations. Additionally, communities looking to recruit a data center operation should look at their commercial energy costs, talent pool and potential underdeveloped areas to place a data center. Connectivity will be a key consideration for a data center and is a key consideration for data center customers.

Both technological advances and companies adapting to industry changes contributed to the growth in number of data centers and data center expansions. A significant amount of the IT budget is spent on maintenance to keep up with the updates from growing customer demand.

From a site selector’s point of view, both perspectives need to look at the countless scenarios impacting the ability of a data center to meet the needs of a customer looking to grow their company’s storage, managed cloud infrastructure and/or application hosting solutions. In evaluating potential data centers, there are five key variables to consider: Location, Power, Space, Flexibility and Connectivity.

Site Selector:  Data Center Customer Perspective
However, how does this apply to a business with data center needs and not a data center provider? Businesses are looking for state-of-the-art data centers built with the most advanced infrastructure technology and designed for the utmost redundancy, resiliency and reliability. Today, companies have access to more data than ever from mobile devices, social media, enterprise applications and the growing Internet of Things (IoT), and there are virtually unlimited opportunities to leverage this data to expand the business.

A potential data center customer should evaluate the benefits of a public cloud (e.g. Amazon Web Services, Google) versus operating directly in a data center (private, co-located, off-site). If the business should be in a public cloud, then the data center customer is the public cloud.

Public clouds are key data center customers. Therefore, the data center has to meet the public clouds unique business requirements that enable them to serve their customers. For example, a new IoT startup would rather use a public cloud than working directly with a data center. Here are the primary reasons businesses and startups use a public cloud and allow their cloud provider to choose their best data center:

  • Offload/reduce business risk
  • Reduce the risk in continuity (environmental, change management, etc.)
  • Rapid development/scaling can be quickly realized
  • Lower initial costs without a significant upfront equity risk
  • Platform as a Service (PaaS) is primary business driver: WPEngine, IBM Bluemix, Heroku which sits on Amazon’s public cloud 
  • Connectivity
  • Global reach
  • Reliability/Resiliency 
  • Business model

However, there are several types of businesses that require a data center such as a company specializing in next generation computer vision algorithms with heavy CPU simulations benefit from an on-premise server farm to process heavy workloads. Also, financial institutions such as Texas Municipal Retirement Systems wants and needs a tight grip on their financial data prefer their own private data center. Additionally, larger institutions may use a combination of owned and collocated data centers where non-secure data can be in a colocation facility, but business data is essential to operations in a company-owned data center due to disaster recovery requirements and other compliance needs.

In this scenario, businesses are building or selecting the best data center that meets their unique business requirements. Here are the primary reasons businesses choose their best data center:

  • Business model
  • Compliance (PCI and HIPAA)
  • Mandated to own their data (financial, medical, federal, etc)
  • Connectivity
  • Low latency is critical for certain critical business functions
  • Cloud providers are no longer cost effective
  • Some cloud providers do not offer a cost-effective solution − while some Infrastructure as a Service (IaaS) is providing GPU accelerated machine learning instances, it can be costly to grow at scale. There is a balance of prototyping, rapid scaling and total operational cost which each organization needs to weigh based on their workload. 
  • Selling services to cloud providers, for example: OpenStack, CloudFoundry

Data centers offer a secure environment enabling their customer (internal/external) to handle their critical business application and big data workloads. Since data centers operate in a private cloud and hybrid cloud infrastructure, companies can take advantage of all the benefits the cloud has to offer, including reliability, availability, flexibility and high performance.  

Site Selector: Data Center Perspective
An organization’s objectives, growth, and success is now highly dependent on the data center to provide the best service possible. Businesses continue to use more data and have more sophisticated usage requirements causing the data center to continually advance and provide better service. However, the data center is also constrained by physical space, costly equipment, software upgrades and connectivity constraints. The customer is constantly evaluating whether to build a private data center, expand its current infrastructure, seek the best colocation option, or a combination of these options while balancing the time to build versus cost to service the business needs.

Data centers are providing highly reliable and secure cloud hosting solutions 24x7x365 simultaneously to thousands of global customers and should be designed with the highest uptime and efficiency possible. Data centers help their customers maximize availability, performance and security as well as comply with strict security and compliance requirements.

Data centers must provide exceptional service along with innovative solutions that help companies move their workloads to the cloud while meeting the stringent security and compliance requirements. Customers expect high capacity, low latency and secure connectivity from the data center and cloud while simultaneously balancing cost, scalability, compliance and security while designed for the utmost redundancy, resiliency and reliability. Given the competitive nature of businesses today, with customers expecting faster response times at all hours of the day, the traditional data center, with its more limited scalability and the inability to address rapid changes in business demands, will not enable enterprises to support the new business models needed today.

From a site selector’s point of view, data centers should also be fully committed to being active, positive members of the communities they operate in. Communities also need to evaluate their brownfields and greenfields along with their energy costs to potentially attract a data center and create new jobs for their residents.

Data Center Challenge – Space
As metropolitan areas grow, a key data center challenge is finding the right physical location to support increasing customer demand. There are three basic solutions to this challenge: colocation, expansion or a new build out. If an organization must own their data center assets, they may look at expanding current infrastructure but face a key financial decision on whether the return on investment of building a new facility outweighs the cost, and if the current infrastructure supports key business functions before the data center becomes operational. If a customer’s infrastructure is too stretched, a colocation facility is the best option for making additional servers available much faster than a customer can build a new data center. This is also the most scalable option and assets can be returned if no longer needed.

For example, in September 2018, Flexential, a leading provider of hybrid IT data center solutions completed the $32 million expansion of its data center near Portland, Oregon. The 115,000-square-foot expansion brought the data center to 240,000 square feet and boasts international connectivity, 18 MW critical load UPS capacity, and industry-leading efficiency and design. The efficient design, coupled with direct, low-latency connections that span the U.S. and provide access to Asia-Pacific, make it an ideal location for companies seeking a cost-efficient IT infrastructure solution complete with capacity to expand with a global connectivity reach.

Therefore, data center location is a critical component for meeting customer requirements dependent on latency, costs, performance and security regardless if it is company owned or a business-service provider.

Site Selector Tip: Economic developers should work with private partnerships to find obsolete buildings for redevelopment into data centers and develop a talent pool to bring more jobs.  

Data Center Challenge – Power
Power consumption is usually a data center’s largest operating cost from running the equipment serving customers. Data centers need reliable power delivered and often overall access to the power grid. For example, proximity to substations and facility feeds increases a data center’s reliability. However, data centers are also looking for locations with cheaper energy costs due to increasing power usage for upgraded IT infrastructure.
For example, Microsoft is currently expanding its Cheyenne, Wyoming data center which was initially announced in 2015 but not needed due to improved server efficiency. Microsoft planned to spend more than $200 million and double the 25 permanent jobs at the center within one to two years. The Cheyenne facility is fully wind powered and uses cheaper and more efficient natural gas instead of using diesel fuel to power its backup generators. Rob Godby, an Associate Professor of Economics at the University of Wyoming, said, “Microsoft’s investments have also been a major victory for the state’s economy as leaders work to diversify it beyond the dominant commodities industry. However, Wyoming provides a perfect environment for data centers: Its cold winters reduce the cost of cooling servers, and the remoteness and low population density helps with security. Lastly, the state’s cheap energy also helps with power-hungry servers.”

Therefore, the data center infrastructure is only as capable, adaptable and reliable as the power system that supports it. If a data center is considering expansion, these are some power features to consider:

  • Secured and diverse electrical and fiber power sources 
  • Dual power feeds throughout using redundant substations
  • Backup power generators
  • Chillers with a computer room air handler
  • Redundant A/B power to each rack
  • Uninterruptible Power Supply (UPS) systems and emergency generators with up to two megawatts of demand and fuel capacity

Site Selector Tip: Ensuring sufficient power will be available for future data center expansions is paramount. When working with a data center client, the team needs to ask a potential location utility provider what the overall supply capacity is and how quickly can it allocate capacity away from other residential and commercial utility customers.

Data Center Challenge – Location
Due to the rise of social media and increasing consumer demand for cloud services, smart city technology leveraging the IoT will be adding to data center demands. For example, the new street lights are LED energy efficient and include built-in wireless connectivity (Bluetooth and Wi-Fi), high-definition digital cameras, and sensors to monitor weather and air quality. They are also part of a control network that can connect a city-wide array of sensors and analytics packages. The urban planner’s goal is to incorporate sensors and data analysis to bring intelligence to urban environments and improve the quality of life for residents. However, smart cities place an increase demand on their closest data center. The data center, in proximity to a smart city, will benefit from a long-term government customer but will need to evaluate how to increase its connectivity, data storage, and power requirements to support the residents of their community.

According to JLL and Area Development, these U.S. real estate markets have increasingly-strong demands for data center expansion: Chicago, Austin-San Antonio, Dallas, Northern Virginia, Norther California, and Phoenix. Like many areas close to major populations, real estate is a scarce resource.

Other site location factors can include climate, the state of the local economy, proximity to consumers, availability of power and networking connections and, perhaps importantly, politics.

With the growing demand for cloud services, data center growth is expected to be solid according to industry analysts. According to, North American markets account for more than 60 percent of the near-400 megawatts currently under construction around the world.

For example, TierPoint recently expanded its New York Data Center for their financial industry customers who depend on ultra-low latency network connectivity to midtown and lower Manhattan. It is located outside New York City’s 12-mile blast zone and the 500-year flood zone. The facility is well positioned to deliver disaster recovery solutions, including business continuity workspace while meeting compliance standards for HIPAA, PCI-DSS, GLBA and SOC 2 Type II and holding a EU-US Privacy Shield certification and ITAR registration.

Houston’s Greenspoint District is positioned literally at the crossroads of the region’s fiber optic infrastructure. More than a dozen long-haul and last-mile carriers have available fiber optic cable. Additionally, Greenspoint’s location outside of the 500-year floodplain, and far enough from the coast, mitigates the threat of hurricanes and provides a safe location where companies feel their data will be secure. Houston’s Greenspoint District is home to enterprise and collocated data centers, as well as high performance computing centers. These firms benefit from the region’s demand for services, economic incentives and a friendly political environment. Data Foundry built a 350,000-square-foot data center campus to expand its presence and capabilities to meet the demands of Houston customers offering wholesale and retail data center space, as well as providing internet connection services. Other industry leaders with locations in Greenspoint are Digital Realty Trust and CyrusOne.

Site Selector Tip: When working with a data center client, location and other factors may change the entire financial equation for expansion versus a new data center. However, keep in mind, the data center customer is focused on saving time and becoming quickly operational.

Data Center Challenge – Flexibility
“It has become essential for companies seeking data center solutions to ensure their provider is capable of effectively expanding infrastructure, power and space to future-proof requirements,” says AJ Byers, President and CEO of Root Data Center. “Historically, it was acceptable for a data center to have deployment timelines of a year and a half, which now needs to be closer to three months for a multi-megawatt project. In fact, most data center operators are still working at that pace, so the ability to accelerate that timeline to 90 days or less is a key differentiator.”

To summarize the factors causing the increased demands on the data center operator:

  • Increasing usage of connected devices 
  • Acceleration of the IoT 
  • Acceleration of user generated data, according to IDC Canada is growing 50 percent per year
  • Increasing demand for storage and reliability

Since data center real estate is becoming scarce, the data center operator faces these challenges:

  • Available power, space and deployment capabilities
  • Higher power densities requirements, as well as increased cabinet space
  • Possibility of building out infrastructure within a geographic location that offers available space
  • Ensure the installation of infrastructure in short time frames
  • The need for high-density equipment requiring an increasing amount of power 
  • 2 kW is barely minimal preparedness to scale both space for cabinets as well as available power per cabinet. For example: a few years ago, a rack or cabinet consuming 2 kW would be considered high.

IT decision-makers must determine the following when choosing a data center as an expansion, new build, or partnering with a colocation service provider:  

  • Access to increased power or space – the data center must have the experience of standing up data halls on short notice
  • When preparing to expand data processing and storage capabilities, evaluate the available power, space and capabilities of potential suppliers 
  • An accurate understanding of a colocation provider’s capacity for scalability is critical
  • Not all data center operators have the ability to deploy a rapid expansion on short timelines

For example, H5 Data Centers, a national colocation and wholesale data center provider, recently expanded its downtown Cleveland data center. The data center expansion includes the build-out of an additional 25,000 square feet of space and associated mechanical and electrical systems. The Data center qualifies for Ohio: state sales and use tax abatement incentives.

Site Selector Tip: When working with a data center client, remind the data center to retain operating funds to purchase that equipment, and the experience, capabilities, skills and expertise to install and make equipment ready in very short time frames to meet IT demand.

Site Selector Tips - Data Center Selection in Practice
At AngelouEconomics, we have worked on several data center site selection projects. We have leveraged industry standard and added a few additional standard set of questions addressing data center location, power, space, flexibility, and connectivity requirements. The list of questions are as follows according to the five key variables to consider: Location, Space, Power, Flexibility and Connectivity.

Location and Space:

  • What is your available build space today? 
  • Do you have rights to any other developed, brownfield, or greenfield space? 
  • How long does it take you to build out a data hall in that space if needed? 
  • Can your landlord state that space is available? 


  • How much bulk power is available to the data center? 
  • How much power is available in the data center? 
  • How quickly can you deliver (#) MWs of capacity? 
  • Can your utility state that your capacity is available? 
  • Can your DC support standard and high-power densities at scale? How dense? 
  • How does the DC handle instantaneous power loads? When at the limit, how do you handle the load pattern?


  • What was the last large and rapid expansion you brought to market? 
  • What does the DC vendor’s physical presence look like? 
  • This is a good indicator of their global reach and if it’s possible for site-to-site connectivity. This is particularly useful for large corporations who need to expand their VPN/WAN.


  • What are the available Internet providers and their limitations?
  • What other companies are located in the same data center? Who are the neighboring data centers? 
  • What is the region coverage in terms of connectivity?

About AngelouEconomics
AngelouEconomics is a leading Corporate Site Location and Economic Development Consultancy. The firm has provided site location services to clients with over $5 billion worth of data center projects and developed over 400 economic development strategic plans for U.S. and international clients. To learn more, visit, email: or call 512-658-8400 (cell).

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