Northern Virginia has become a major hub for data centers in the United States. In fact, over 70% of internet traffic in the world flows through data centers located in Northern Virginia. This region has attracted massive investments from major technology companies like Amazon, Microsoft, Facebook, and Google who have built large data center campuses to support their cloud computing services. But why has Northern Virginia emerged as such a prime location for data centers? There are several key factors that explain the rapid growth of data centers in Northern Virginia.
Proximity to Washington D.C.
One of the main reasons why Northern Virginia has so many data centers is its proximity to Washington D.C. The region is located just outside the nation’s capital and is part of the broader Washington D.C. metropolitan area. This provides several benefits for data center operators. Firstly, the location allows for lower latency connectivity to serve major population centers on the East Coast. Data centers in Northern Virginia can provide quick access to internet content and services for the many users in Washington D.C. as well as other major cities like New York, Philadelphia, and Boston. Secondly, the location outside of Washington D.C. allows data centers to avoid some of the regulatory and tax burdens of being within the district while still maintaining close proximity. Data center providers have more flexibility in Northern Virginia compared to Washington D.C. in terms of regulations, land development, and infrastructure policies that accommodate their facilities.
Highly Connected Internet Infrastructure
Northern Virginia has a robust internet infrastructure and some of the highest network connectivity in the world. The presence of major internet exchange points like Equinix Ashburn and Coresite Reston allow data centers to directly peer with hundreds of networks and service providers. There are many fiber optic cables that run through the region providing high bandwidth capacity. This rich connectivity makes Northern Virginia an ideal place for content distribution networks and cloud services that require low latency and high throughput connections. The area is essentially the hub of the internet on the East Coast given its central position in many networks. This enables data centers to efficiently distribute and exchange massive volumes of internet traffic.
Affordable Land and Power
Compared to many other parts of the country, land and power costs are relatively affordable in Northern Virginia. While still an expensive metro area in general, data center providers are able to find suitable land parcels and development facilities at costs lower than other major cities. Energy costs are lower partly thanks to the de-regulated energy market in Virginia. There is also sufficient power infrastructure in the region to meet the needs of power-hungry facilities. The scale of data centers in the area has encouraged utility providers to continually expand availability. Between affordable real estate and power, Northern Virginia offers cost efficiencies that data centers require.
Business-Friendly Policies
Northern Virginia and the broader state of Virginia have data center-friendly policies that encourage investment and development. Tax incentives reduce the costs for major projects. There are also customized power agreements available for large energy consumers like data centers. The regulatory environment is relatively flexible compared to other jurisdictions when it comes to issues like permits, construction, and environmental policies. This makes it easier for data centers to undergo expansion and upgrades. The state has long recognized the value of data centers and actively courts providers to invest in Virginia. Many local governments are also willing to negotiate terms for new facilities.
| Company | Northern Virginia Data Centers |
|---|---|
| Amazon Web Services | 28 |
| Microsoft | 6 |
| Facebook/Meta | 4 |
| 3 |
Existing Tech Ecosystem and Talent Pool
The presence of a skilled tech workforce and established tech community in Northern Virginia is advantageous for data centers. Major employers in the area include defense contractors, government IT agencies, consulting firms, and a growing number of software companies. This provides a sizable talent pool for data center operators to hire from as they scale up their facilities. The highly educated labor force possesses both the technical capabilities and security clearances needed for managing critical IT infrastructure. The existing tech ecosystem also enables greater collaboration opportunities and technology transfer.
Mild Climate
While not the most important factor, Northern Virginia’s moderate mid-Atlantic climate does provide some advantages for data centers. The area faces fewer extremes in terms of heat, humidity, and natural disasters compared to other regions. This allows data centers to reduce cooling costs and have relatively few weather-related disruptions to service. The climate enables more consistent operating conditions for the sensitive computer hardware within data centers. Some providers specifically cite Northern Virginia’s mild climate as one of the reasons they selected the region for development.
National Security Drivers
The prominence of the U.S. government and military presence in Northern Virginia leads to high demand for secure data services. Much of the internet traffic moving through the region comes from government agencies and federal contractors that require reliable, highly secure data center capacity near Washington D.C. The Department of Defense has been proactive in encouraging development of hardened data centers in Northern Virginia that are less prone to attack. The overall national security community relies on the data center infrastructure in the area for critical communications and data storage. This federal anchor tenancy provides a stable source of demand.
| Year | Northern Virginia Data Center Capacity (megawatts) |
|---|---|
| 2005 | 324 |
| 2010 | 528 |
| 2015 | 1,150 |
| 2020 | 1,800 |
Existing Cluster Attracts More Growth
The presence of an already substantial data center cluster in Northern Virginia has created a self-reinforcing effect for continued growth. The critical mass of data centers in the region drives further investment by allowing new entrants to readily connect into established networks and infrastructure. Existing players also continue expanding their presence to capitalize on the interconnection benefits. The cluster effect essentially creates a network effect for data centers to be located near each other. Once Northern Virginia established an early advantage, it has maintained its lead by pulling in more data center development.
Demand for Cloud Computing
The rise of cloud computing has fuelled enormous demand for hyperscale data centers like those in Northern Virginia. As more businesses shift their IT workloads to the cloud, the largest cloud platforms from Amazon, Microsoft, Google and others require massive data center capacity to provide services. The scalability and connectivity available in Northern Virginia is ideal for deploying these vast cloud data centers. The region provides the backbone infrastructure to power the growth of cloud computing nationwide. More and more cloud traffic will likely continue flowing through Northern Virginia.
Downsides of Data Center Concentration
Despite the many advantages, there are some downsides to the massive data center concentration in Northern Virginia that need to be considered:
– Increased strain on utilities – The huge electricity demands of data centers put pressure on the power grid and can cause price spikes. There are concerns about long-term electricity supply.
– Environmental impacts – High energy use and emissions from generators impact local air quality and carbon footprints. Massive water use for cooling is also an issue.
– Community disruption – Rapid construction and heavy traffic for data center facilities can affect local communities and land use plans not designed for industrial zones.
– Single point of failure – Regional Internet outage or disaster in Northern Virginia could disrupt a major portion of online services. Geographic diversity in data centers can hedge risk.
– National security issues – Concentration of data centers representing strategic IT assets raises concerns about making them a target for cyber attacks or military strikes.
Still, the scale and momentum of the Northern Virginia data center hub make it unlikely to be unseated anytime soon as the heart of the internet. But these downsides may prompt some providers to consider alternative locations for parts of their capacity and workforce.
Conclusion
Northern Virginia has emerged as the premier data center hub in the world due to its unique combination of connectivity, affordability, infrastrucutre, and favorable policies. The region will likely continue its dominance as cloud computing drives more demand for highly networked and scalable data center capacity. While the boom has created challenges, Northern Virginia has established itself as vital data center ecosystem supporting our digital economy. The future will see even more investment and innovation focused on this nexus of the internet.
