• About Us
  • Partnership Opportunities
  • Privacy Policy

Data Center Frontier

Charting the future of data centers and cloud computing.

  • Cloud
    • Hyperscale
  • Colo
    • Site Selection
    • Interconnection
  • Energy
    • Sustainability
  • Cooling
  • Technology
    • Internet of Things
    • AI & Machine Learning
    • Edge Computing
    • Virtual Reality
    • Autonomous Cars
    • 5G Wireless
    • Satellites
  • Design
    • Servers
    • Storage
    • Network
  • Voices
  • Podcast
  • White Papers
  • Resources
    • COVID-19
    • Events
    • Newsletter
    • Companies
    • Data Center 101
  • Jobs
You are here: Home / Special Reports / The Home of the Cloud: Rapid Growth Continues in Northern Virginia

The Home of the Cloud: Rapid Growth Continues in Northern Virginia

By DCF Staff - June 27, 2022 Leave a Comment

The Home of the Cloud: Rapid Growth Continues in Northern Virginia

Digital Realty's Building P in Ashburn is among the multi-tenant data center facilities housing different types of workloads. (Photo: Digital Realty)

LinkedinTwitterFacebookSubscribe
Mail

The Northern Virginia data center market is the largest in the world and its rapid growth has transformed the local real estate market. This launches our special report series on the Northern Virginia Data Center Market.

NoVa

Get the full report.

Northern Virginia is the epicenter of digital infrastructure in North America, and the favorite data center location for hyperscale operators seeking capacity to power cloud computing platforms and social networks.

The region is one of biggest success stories of the Internet economy, with the rapid growth of the data center industry transforming real estate markets and the local tax base.

The Northern Virginia data center market is spread across a number of towns in Loudoun, Prince William and Fairfax counties, and shows signs of expanding into adjacent counties. At the heart of the region’s geography and success is Ashburn, which has become known as Data Center Alley for its concentration of mission-critical facilities.

Ashburn sits atop the world’s densest intersection of fiber networks, making it an ideal location to store and distribute data. It is unique in its connectivity, and its data centers are laying the physical foundation of the digital economy.

Northern Virginia continues to be largest market for data center space in the U.S. and is home to 11.9 million square feet (SF) of commissioned multi-tenant data center space, representing 1,920 megawatts (MW) of commissioned power, according to market research from datacenterHawk. Demand for space is very strong, as reflected in the vacancy rate of just 1.28 percent in the region.

Northern Virginia has seen unprecedented levels of data center leasing, record valuations for land in Data Center Alley, and a surge in land banking as developers seek to lock down space for future expansion in this region, which has strategic importance for enterprise customers, as well as hyperscale players. Northern Virginia continues to see demand for traditional colocation space for enterprises, content companies, IT integrators and government agencies.

The latest numbers on market growth are extraordinary even by historical standards. Here are some data points:

According to datacenterHawk, 237MW of commissioned data center capacity was either absorbed or pre-leased in NoVa in the fourth quarter of 2021, easily exceeding the industry record of 115MW for an entire year — which was established in 2017 in Northern Virginia .

The volume of data center capacity in the planning phase in Northern Virginia has reached 4,022MW—that’s over 4 gigawatts (GW). This is partially driven by new players entering the market, but also includes major expansions by experienced players.

Northern Virginia

The Expanding Northern Virginia Market

Northern Virginia is the world’s largest data center market. This extremely mature and well-connected area traces its roots to the U.S. Government’s experiments in wide area fiber optic networking in the late 1960s. The low-latency connections to the national fiber network backbone along with a relatively business- friendly environment make NoVa the top market for data centers serving the area’s biggest public and private enterprises.

Over 70 firms with annual revenue over $500 million are headquartered in Virginia with eight of the nineteen of the Fortune 500 companies in Virginia headquartered in the NoVa area.

NoVa is the home of the cloud for a number of following reasons:

  1. Competitive Colocation/Cloud Environment – Northern Virginia has the largest presence of colocation and cloud providers in the U.S., creating a very competitive environment.
  2. Strategic Location – The Northern Virginia market provides a strategic, cost-effective market for companies needing their data center in the northeastern U.S.
  3. Relatively Free of Natural Disasters – Other than occasional high winds and rain from hurricane remnants, the Northern Virginia market is typically very safe.
  4. Reasonable Power Cost – Northern Virginia ’s power costs are competitive among major colocation markets and is reasonable considering the total cost of occupancy for long-term requirements.
  5. Business Climate – Despite some economic challenges in Virginia over the past few years, the area’s businesses continue to grow, creating data center requirements for the market.

The Virginian economy is diverse, with both a strong manufacturing base (producing everything from wood flooring to rocket engines) and information services sector. Over 70 firms with annual revenue over $500 million are headquartered in Virginia with eight of the nineteen of the Fortune 500 companies in Virginia headquartered in the Northern Virginia area. Since 2018, nearly $2 billion was spent on land purchases for data center development in Northern Virginia.

While the downtown Washington, DC area has several smaller data centers, the bulk of data center investment occurs outside of the downtown area. Concentrations of colocation, cloud, and enterprise data centers are located in several cities to the northwest corner of the market, including Ashburn, Sterling, and Reston, VA.

The Ashburn area (a suburb north of Dulles Airport so dense it is commonly referred to as Data Center Alley) is dominated by a number of large data center providers. It is home to multiple large campuses owned and operated by Digital Realty, which is the largest provider in the market and positioned for long-term growth in the region. Digital Realty has developed two massive data center campuses, and in 2017 it acquired a third large campus with its acquisition of DuPont Fabros Technology.

Equinix is also a key player in the Northern Virginia data center ecosystem, operating a key regional connectivity hub on its campus in Data Center Alley. Equinix operates 14 data centers in the area, and has secured land in the area to continue to expand.

Approximately one mile to the southeast is Sterling, an area with a growing number of data center providers. Digital Realty, CyrusOne, Cyxtera, and Stack Infrastructure are well positioned to be competitive in this area for the immediate future. Reston continues to grow as well, with significant investments from CoreSite, Digital Realty, and Equinix.

The strong demand for data center space in Northern Virginia , along with the dwindling supply of development parcels, has led to the emergence of several regional sub-markets beyond the core of Data Center Alley in Ashburn. These include:

  • The Dulles Cloud Corridor – The area surrounding Dulles Airport is the new frontier for data center development, home to campuses for Amazon Web Services, Google, and Microsoft in Arcola. Digital Realty plans its largest campus here, and AWS has been aggressively acquiring sites around all sides of Dulles Airport.
  • The Leesburg Cluster – A Google data center is the largest facility here, but it has company in a Compass Datacenters campus. Microsoft and TA Realty plan large projects in the area.
  • Prince William County – The Manassas area is becoming a focal point for developers seeking large properties for long-term growth. AWS operates multiple campuses in the region, and CloudHQ, Iron Mountain, QTS, STACK Infrastructure all have campuses. Corscale and Yondr Group are new entries with plans for large campuses near Manassas, while a group of homeowners have banded together to market the Prince William Digital Gateway, a controversial data center district that could support up to 21 million square feet of new data center development.

While government agency requirements have increased the data center demand in NoVa, the majority of the market is made up of other industries finding the market attractive. Aerospace, financial, managed hosting, technology, and telecommunications companies have all staked claims NoVa’s data centers. Colocation requirements in the NoVa market are typically larger than most markets. This is due to the nature of the requirements, as well as the availability and competitive pricing in the market.

Download the full report, Northern Virginia Data Center Market, courtesy of Digital Realty, to learn more about this competitive data center market. In our next article, we’ll look at the market’s history and key market updates.

LinkedinTwitterFacebookSubscribe
Mail

Tagged With: Ashburn, cloud data centers, Colocation, Data Center Frontier Special Report, Digital Realty, Northern Virginia Data Center Market

Newsletters

Stay informed: Get our weekly updates!

Are you a new reader? Follow Data Center Frontier on Twitter or Facebook.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter

Voices of the Industry

Building an Enduring World Begins with Accountability and Defining an Approach for Long-term Success

Building an Enduring World Begins with Accountability and Defining an Approach for Long-term Success TJ Faze, Head of ESG Strategy and Engagement at Vertiv, outlines the company's learnings around its recent ESG efforts.

White Papers

Data Center Operations Redefined Through People, Processes and Technology

Data center operations are on the verge of a new normal, and operators have the chance to redefine the industry as it evolves to meet the changing needs of its customers. A new white paper by BCS presents strategic solutions for safeguarding mission critical infrastructure in data centers during uncertain times.

Get this PDF emailed to you.

We always respect your privacy and we never sell or rent our list to third parties. By downloading this White Paper you are agreeing to our terms of service. You can opt out at any time.

DCF Spotlight

Data center modules on display at the recent Edge Congress conference in Austin, Texas. (Photo: Rich Miller)

Edge Computing is Poised to Remake the Data Center Landscape

Data center leaders are investing in edge computing and edge solutions and actively looking at new ways to deploy edge capacity to support evolving business and user requirements.

An aerial view of major facilities in Data Center Alley in Ashburn, Virginia. (Image: Loudoun County)

Northern Virginia Data Center Market: The Focal Point for Cloud Growth

The Northern Virginia data center market is seeing a surge in supply and an even bigger surge in demand. Data Center Frontier explores trends, stats and future expectations for the No. 1 data center market in the country.

See More Spotlight Features

Newsletters

Get the Latest News from Data Center Frontier

Job Listings

RSS Job Openings | Pkaza Critical Facilities Recruiting

  • MEP Coordinator - Data Center Construction - Ashburn, VA
  • Data Center Facility Engineer - Chantilly, VA
  • Data Center Site Operations VP - Seattle, WA
  • Senior Electrical Engineer - Data Center - Denver, CO
  • Senior Estimator - Data Center Construction - Denver, CO

See More Jobs

Data Center 101

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center Frontier, in partnership with Open Spectrum, brings our readers a series that provides an introductory guidebook to the ins and outs of the data center and colocation industry. Think power systems, cooling, solutions, data center contracts and more. The Data Center 101 Special Report series is directed to those new to the industry, or those of our readers who need to brush up on the basics.

  • Data Center Power
  • Data Center Cooling
  • Strategies for Data Center Location
  • Data Center Pricing Negotiating
  • Cloud Computing

See More Data center 101 Topics

About Us

Charting the future of data centers and cloud computing. We write about what’s next for the Internet, and the innovations that will take us there. We tell the story of the digital economy through the data center facilities that power cloud computing and the people who build them. Read more ...
  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

About Our Founder

Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution. Meet the DCF team.

TOPICS

  • 5G Wireless
  • Cloud
  • Colo
  • Connected Cars
  • Cooling
  • Cornerstone
  • Coronavirus
  • Design
  • Edge Computing
  • Energy
  • Executive Roundtable
  • Featured
  • Finance
  • Hyperscale
  • Interconnection
  • Internet of Things
  • Machine Learning
  • Network
  • Podcast
  • Servers
  • Site Selection
  • Social Business
  • Special Reports
  • Storage
  • Sustainability
  • Videos
  • Virtual Reality
  • Voices of the Industry
  • Webinar
  • White Paper

Copyright Endeavor Business Media© 2022