Data Center Wars – Austin Rising

Austin, Texas once thought of primarily as a government and university town is quickly becoming an integral part of the Texas economic landscape. While still overshadowed by the sheer size of the Houston and Dallas/Fort Worth economies, Austin has emerged as a major technology hub that has attracted many leading technology firms to house significant operations in the Greater Austin Area.

In recent years major investments have been made by several data center colocation firms which has drastically increased the overall supply and options within the Austin market. The heaviest concentration of new facilities has been in and around the MetCenter, just a few miles southeast of downtown Austin.
What is the MetCenter?

The MetCenter is a 550 acre development with many ideal amenities for large, critical data center operations. It is conveniently located near the intersection of two major highways (State Highway 71 & U.S. Highway 183) and has ample availability of redundant utilities and telecommunication services. Due to the attractiveness of the development and the overall growth of demand for data center services in the Austin area, several data center facility firms have all launched brand new data center campuses all located in or within walking distance from the MetCenter.

The Home Teams

Headquartered in Austin, Data Foundry has deep roots in the telecom industry initially starting out in 1994 as, one of the first 50 internet service providers in the United States. Data Foundry has had major data center facility operations in Austin since 2003 when it opened its first site in the MetCenter area. It launched what is now its flagship data center in 2011 called“Texas 1”, just a short drive from the original site. This attractive 250,000 square foot facility sits on a 40 acre “ranch” and is designed and decorated with some tasteful, local Texas flair. The Texas 1 Facility is purpose built to accommodate the latest high-density, critical infrastructure needs. Data Foundry has proven successful filling this facility and has expansion plans in the works.

OnRamp, also founded in 1994 as an early internet service provider, kicked off its first purpose built data center operation in Austin in 1998 less than 2 miles from the MetCenter. In 2014 it joined the new Austin data center capacity race by launching a new, modern facility a short walk from Data Foundry’s Texas 1. While OnRamp specializes in colocation services, it also offers a very hands-on service in supporting customers that require compliant, managed solutions as well. With additional out of state managed offerings in Raleigh, South Carolina, OnRamp is able to provide full managed and hybrid solutions for those looking for more than just high grade colocation services.

The Visitors

CyrusOne has its original roots in Austin, where founder David Ferdman assembled the original team but did not build its first facility there until 2009, nearly a decade after launching its first site in Houston. Now a public company (CONE) headquartered in the Dallas/Fort Worth area after relocating from Houston, CyrusOne has established itself as a major brand name throughout the state. Competition heated up when the decision was made to place its first site right next door to Data Foundry’s original 2003 site. Just two short years later, on the back of local demand and demand from its customers in other markets needing secondary sites, it built “Austin II” just around the corner within the MetCenter, the very same year Data Foundry launched Texas 1.

San Francisco based Digital Realty is the big kid on the block being a major public company (DLR) with a market cap over $9 billion. Digital made quite a splash in the Austin market in May of 2013 with their $31.9 million acquisition of a six building portfolio of properties in Austin’s Met Center Business Park. Two of the six buildings, totaling approximately 100,000 square feet, are operating data centers under lease to Data Foundry and CyrusOne. The six buildings are located adjacent to Digital Realty’s data center in the MetCenter. Nearly half of Digital’s 75,000 square foot facility is occupied by a single client with the other half consisting of two of Digitals standard 10K square foot “Turn-Key” data center suites.
With Digital’s nascent entry into the world of colocation, staffing and support of the facility are minimalistic, as one would expect from a wholesale real estate/data center company. Clients will, however, still benefit from Digital’s world class operational procedures and Tier 3 design features. For enterprise organizations with large data center foot prints and a global presence, Digital could be an ideal fit.

The Game

The growing competition in the Austin area has provided numerous benefits to end users. An ever increasing number of high quality facility options along with more specialized managed service offerings have put on the table a broad array of choices to fit the needs of consumers. Start-ups and smaller independent organizations benefit from the availability of managed hosting and public/private cloud access while larger enterprise type organizations can leverage their own IT personnel in a more traditional colocation environment. Additionally, the entry of new players has resulted in more aggressive pricing across the board.

About the Authors:

Todd Smith and Kevin Knight specialize in the data center facility market working for the technology advisory firm Kiamesha Global ( If your organization is considering the potential benefits of a data center relocation, expansion or simply want to better understand your options in the data center marketplace, Todd and Kevin can be contacted via e-mail at and Even if you have no changes under consideration for the New Year, they would welcome the opportunity to provide you with an assessment of the current market value of your existing data center portfolio’s in-house and/or collocated facility assets in order for you to better recognize where you stand in this rapidly evolving market.