Ashburn: A Landscape Transformed by Cloud Computing

ASHBURN, Va. – It’s tempting to think of cloud computing as an abstraction, defined by all the things it isn’t. It isn’t your desktop or laptop. It isn’t the IT closet at your office. It’s your data, only someplace else.

That someplace else is here in Northern Virginia. To see the growth of cloud computing writ large, drive the roads that traverse the heart of “Data Center Alley,” the cluster of server farms surrounding the world’s leading Internet intersection.

As you cruise along Loudoun County Parkway or Waxpool Road or Pacific Boulevard, “the cloud” rises along the roads of Ashburn. This is where the cloud becomes real, in concrete and steel.

In more than 20 years as America’s Internet Capitol, Ashburn has never seen a moment like this. Enormous data centers are under construction virtually everywhere you look. At other sites, existing buildings are being prepared for demolition or renovation for a future data center campus.

As a digital transformation sweeps the world, Internet infrastructure will become a more meaningful part of our cities and suburbs. As America’s largest digital crossroads, Ashburn represents the bleeding edge of that trend, a place where data centers filled with cloud servers are interspersed with malls and golf courses and townhouse developments.

Loudoun County offers early lessons on how the Internet knits itself into the fabric of modern life – how data centers impact the life of a community, and how local officials balance the economic benefits (which are considerable, at least in Northern Virginia) and the potential tensions.

Where All the Networks Meet

Between Loudoun, Fairfax and Prince William counties, Northern Virginia is home to more than 100 data centers and more than 10 million square feet of data center space. As the cloud grows, having servers in the region has become the table stakes for companies with ambitions in cloud computing. The area is unique in its connectivity.

The epicenter is found in Ashburn, in a cluster of data center buildings operated by Equinix, a company that specializes in making the physical connections that tie the Internet together. The Equinix campus is where all the networks meet, creating a powerful multiplier effect in which each new connection adds to the value of its digital ecosystem.

As a result, “distance to Equinix” has become a key metric in procuring sites for new data centers in Ashburn. This is easily seen in the neighborhood geography, which features data centers radiating outward from the Equinix campus, in nearly all directions. Fiber-optic cables run through conduit buried along both sides of  major roads, and many are so stuffed with cabling that Loudoun County officials have begun approving fiber conduit in the medians.

“You can look at a three- or four-mile radius of Equinix, and the infrastructure there is like no place on the planet,” said Thomas Sandlin,  of real estate firm Avison Young.

Building Bigger Than Ever Before

Perhaps the best place to visualize this along a stretch of Loudoun County Parkway, which runs through the center of Data Center Alley. As you go north past the Verizon (formerly UUNet) campus, where Ashburn’s Internet boom began, you drive between two of the largest data centers ever built.

On one side of the road is Building L, a new project from Digital Realty. The two-story building spans 1.06 million square feet, and will support 84 megawatts of data center capacity, deployed across three phases of construction. It’s the down payment on a massive data center campus that will fill 243 acres with buildings housing servers for the world’s largest technology companies.

Across the road is the other building everyone in Ashburn has been talking about. The towering structure will be a CloudHQ data center that will house servers for a marquee player on the global technology scene. The project was secured with the largest leasing deal in the history of the data center industry.

An important note: Although these buildings are huge, they are not speculative construction. This is not “build it and they will come.” Both huge data centers are fully pre-leased or leased, representing more than 150 megawatts of current and future capacity.

These may be the biggest projects. But there’s plenty of others, as you quickly learn as you continue the drive through Northern Virginia.

Just a couple of intersections to the East, Vantage Data Centers is well underway with construction on its new $1 billion Ashburn data center campus, which will feature 142 megawatts of capacity. The company hopes to bring its first data center online in 2019 with 30 megawatts of capacity. Vantage, which is based in Silicon Valley, has big plans for the 42-acre property, where it plans to build five data centers.

The accelerating demand in Ashburn is reflected in the design evolution at the Sabey Data Centers campus. Sabey’s first building, which opened last year, offered 7.2 megawatts of space across four data halls.

The Seattle-based developer has raised its game with its next structure, Building B, a two-story data center designed for 22 MW in order to make the most use of the power capacity provided by an on-site Dominion Energy substation. The project is expected to come online in early 2019, and Sabey says it can deliver a single data hall or the entire building.

The building boom doesn’t end at Ashburn’s borders, as seen when you enter nearby Sterling, Virginia . Last year we provided DCF readers with a closer look at the first phase of the Sterling V data center campus being developed by CyrusOne. The developer has moved onto construction of the second phase, doubling the capacity of the project to 1 million square feet, with more than 550,000 square feet of raised floor space. The pre-cast concrete walls feature openings where multiple pre-fabricated power rooms will be attached to the structure, accelerating the construction process – more cloud, delivered faster. Each power room supports 2.25 megawatts of power, and is docked to the side of the building.

Beyond Ashburn

While Loudoun County is the focal point of the data center construction boom in Northern Virginia, adjacent counties have seen increased activity. About 10 miles east in Fairfax County, CoreSite is building a new data center campus in Reston that will add 100 megawatts of capacity and 900,000 square feet of data center space. The first phase of data center capacity (VA3) will open in early 2019, and feature 21 megawatts upon completion.

CoreSite is known for its “infill” data center projects, as it builds many of its data centers in urban centers where land is constrained. The company has data centers in Los Angeles, downtown Chicago, and Washington, D.C.

$250 Million in Data Center Tax Revenue

Being the home of the cloud has its benefits. The data center business has been good for Loudoun County, which is the wealthiest county in America by average household income ($134,464), according to the Census Bureau. That robust economy is supported by many factors, including aviation and aerospace, the federal government, and defense contracting.

Data centers boost construction employment. But they are highly automated, and thus don’t direct create a large number of full-time jobs. The tradeoff is that they generate large amounts of tax revenue and don’t create strain on local schools and traffic.

In Ashburn, the growth of the data center sector has had an outsized impact on the tax base.

“This year in Loudoun County we will have a quarter billion dollars of tax revenue from data centers,” said Buddy Rizer, Executive Director of Economic Development. “Data centers are the engine of innovation. They enable a lot of other businesses.”

More than 20 states now use economic incentives to attract data center projects, yearning to land deals with Facebook, Google, Apple, Amazon or Microsoft that would signal their transition to the new digital economy.

Incentives for data centers have become a hot button issue in some states, with taxpayers and legislators questioning the value of perks for giant tech companies. Your mileage may vary, with different towns citing different experiences with these projects, depending on the generosity of the incentives.

But Virginia has seen a strong return on its investment in data center incentives, according to an economic impact study by Mangum Economics, a Richmond-based research firm. For every dollar in county expenditures, the data center sector provided approximately $9.50 in tax revenue to Loudoun County, and approximately $4.30 in tax revenue to Prince William County, the study concluded.

Striking A Balance Between Computers and Community

Rizer and his team have been on the front lines of the cloud boom. No other market approaches the scale of Ashburn. This year, leasing in Northern Virginia will likely be four times greater than in any other U.S. market.

In many ways, the experience in Loudoun County isn’t likely to be easily replicated. Although other markets may not experience the density of data centers seen in Loudoun, other regions may benefit from some of its experiences as the global market grows.

Amid a landscape transformed by the cloud, the Loudoun team has pioneered the formula for striking a balance between development and quality of life. Data Center Alley is in the Eastern portion of Loudoun County, an active business corridor which is also home to Dulles Airport. But the Western section of the county is known for agriculture, including 43 wineries and 15 breweries.

A key task now is maintaining the balance. Data center demand has spurred a land grab around Ashburn, with most prime development properties being acquired for data center development. The area is also expected to see growth in retail, office and residential development with the extension of the Metro Silver Line station to Ashburn sometime next year. Meanwhile, all of Northern Virginia is anticipating benefits from the planned Amazon HQ2 development at National Landing in Arlington.

How do local officials make it all work? Not all residents are happy about all the data centers. Some have expressed concerns about noise and the sometimes uninspiring exterior facades. To address these tensions, Rizer and the economic development team have convened conversations between the industry and community.

In 2014 the Loudoun County Board of supervisors created guidelines for data centers requiring screening around equipment yards, as well as improvements to data center facades. The board also said it would work more closely with data center operators on enforcing current ordinances on noise.

One response is improved data center design. Digital Realty began adopting glass exterior facades for many of its buildings, especially those facing major roads. RagingWire Data Centers has used color and landscaping in its projects, and its VA3 data center was recognized by Loudoun Design Cabinet as a pace setter in community-oriented, ecological design.

Loudoun is also dealing with land use concerns around its data center sector. Last year, local residents expressed concerns about the environmental impact of a new Compass Datacenters project on a site near the Loudoun Greenway.  After lengthy discussions with county officials and residents, the project was reworked and approved and is now under construction.

“Our team worked closely with the County to make a series of revisions to our plan to ensure that those environmental concerns are all addressed,” said Chris Curtis, Senior Vice President of Development & Acquisitions at Compass. “I see this as a model for how data centers companies, counties and residents can work together on these complex projects so everyone’s needs are met.”

Loudoun is also encouraging the development of multi-story data centers to improve the land use and maximize the capacity – and revenue – that service providers can capture from each parcel of land. Vertical data centers can offer improved economics, and even create the potential for mixed-use projects that combine data facilities with other uses.

A Virtuous Energy Cycle?

That could even create the potential for a virtuous new relationships between the cloud data centers and the community. One opportunity is reusing the waste heat generated by servers, which could be integrated into district heating systems for offices or even residential developments. This is common in Europe, and the focus of a project in Seattle where waste heat from the Westin Building Exchange is heating nearby offices for Amazon.

This is a model that could gain traction with the development of edge computing and smart cities, which could bring more data center capacity into urban environments. As the new Metro station creates demand for office and residential development, it could create an opportunity for energy collaboration.

“Why not residential on top of a data center?” said Bill McCarthy, an architect with Callison RTKL who works on data center design in Northern Virginia. That type of initiative, along with continued efforts to create less industrial building facades, could be important to the future integration of Internet infrastructure and both urban and suburban landscapes.

“We want to be responsible with our land and projects,” said McCarthy. “The community would rather have a well-designed data center. That building will be there for a long time.”