Data Center Wars – Dallas/Fort Worth – Part One

There is a saying that everything is big in Texas.  While that may just represent a bit of the brashness we have a reputation for in the Lone Star State, the saying definitely holds true when it comes to the DFW data center market.

With the largest metro population in the Southern United States of nearly 7 million, and a metro area land mass larger than the states of Connecticut and Rhode Island combined it is a big market just on these terms.  In addition to its sheer size and population, its central US location, rich telecommunications infrastructure and relative safety from natural disasters Dallas/Fort Worth has become one of the most popular destinations for major data center developments.

A Highly Competitive Buyer’s Market

With a variety of data center facility options this is currently a highly competitive buyer’s market.  Significant capacity and new entrants have come on line in recent years.  David Liggitt is the President of datacenterHawk, a web-based platform providing advanced research and tools to data center market professionals (  His firm keeps a watchful eye on these market developments and trends.

“The Dallas/Fort Worth colocation market has grown considerably over the last three years,” Liggitt says.  “Data center users are attracted to DFW because of the affordable power costs, abundance of fiber, tax abatement opportunities, and the competitive nature of the colocation market.  The area appeals to a wide variety of industries, including financial, technology, insurance, telecom, and healthcare companies.  Some of the largest cloud service providers also have a large presence in Dallas as well. The 208 MW of commissioned colocation power makes the DFW market the third largest in the United States.”  With the majority of this capacity under lease, he tells us there is an additional 18 MW of colocation power currently under construction to meet demand. Data center providers are eyeing future growth in Dallas/Fort Worth, with approximately 180 MW planned for development when opportunities arise.

Competition is Compressing Pricing

The competitive market dynamics are also impacting pricing in DFW.  “From an economics perspective, data center operators have been aggressive over the last twelve months.  Colocation pricing has decreased by 8-10% on larger DFW transactions,” Liggitt says.  “Data center providers have also been working to provide a wider range of services. Most in Dallas/Fort Worth have invested significantly over the last few years by increasing offerings like fiber site interconnection, direct connectivity to cloud providers, and increased managed services.”

More to Come

There is a lot to cover with the DFW market from robust, central telecommunications hubs to massive wholesale developments in the north so we are going to break it down into pieces over the coming weeks.  In Part Two of this series we will delve into the history of the DFW Data Center Market and what some of the original data center operators have been doing to evolve as demand and competition continue to heat up.  Stay Tuned…