Why is Ashburn known as “Data Center Alley?”

by | May 18, 2022

Introduction to Data Center Alley

Based in Loudoun County, Virginia, Ashburn’s Data Center Alley is the top data center market in North America. Just a stone’s throw from Washington, DC, it forms an integral part of the Dulles Technology Corridor. With unmatched fiber infrastructure, reasonable energy costs, and great tax incentives, Ashburn is the preferred location for data center operations nationwide.

In Northern Virginia, the area that was home to one of the first large peering exchanges has evolved into what is now the fastest-growing data center market worldwide. Just between Loudoun and Fairfax counties, there are approximately 118 data centers, with over 10 million square feet of data center space. Datacenter providers and users are drawn to the area to benefit from its invaluable ecosystem which is built on top of the world’s densest fiber network.

In fact, this unmatched level of connectivity is the reason that the first telecom and internet companies were drawn to Data Center Alley.

Pre-Data Center Alley

In 1992 a group of network providers in Virginia joined forces and connected their networks. Alternet, PSINet, and Sprint-ICM all worked with Metropolitan Fibers Systems to form MAE-East, one of the first internet exchanges. Eventually, in 1993 they were awarded a grant by the National Science Foundation which made it one of the four original Network Access Points.  By the late 1990s, this section of North Virginia was viewed as the perfect place for the expansion of the internet and fiber networks. The land was reasonably priced, the electricity cost was low and it was in close proximity to a skilled and educated population. 

AOL was among the first to set up its base there and brought with it an investment in fiber and power infrastructure.  They were followed by other established companies like Verizon, Orbital Sciences, and Telos that needed connectivity and power at scale. When Equinix (the world’s largest colocation data center) arrived in Ashburn, this connectivity scale became a virtuous cycle of IT infrastructure investment. Like all data centers, Equinix competes in creating the physical infrastructure that forms the backbone of the internet.

When they created their campus of data centers, it formed the foundation for interconnectivity with massive potential. Each new connection contributed to the wider ecosystem, creating a compounding effect. Other companies such as Digital Realty and Dupont Fabros (now owned by Digital Realty) began to build outward from the campus to benefit from the powerful digital ecosystem. The demand for space in the Data Center Alley began to rise as more organizations realized the value of tapping into such a highly interconnected infrastructure leading to the development of more facilities. The region evolved at such a phenomenal rate that, by 1997, half of the world’s traffic was already flowing through it.

In about two decades, the industry evolved from a retail colocation market to the world’s data center capital. Everything from wholesale data suites to custom-built cloud facilities are available in Ashburn. Today, technology powerhouses like Google, Microsoft, Facebook, Oracle, and Amazon all have stakes in the Data Center Alley to support their rapidly growing cloud computing needs.  Loudoun county alone hosts more than 60 data centers that service around 3000 tech companies. Today, up to 70 percent of the world’s internet traffic flows through these centers daily.

Establishing Data Center Alley

This level of infrastructure development is also supported by the local government. The data center industry is recognized as a vital component of the modern economy, as it impacts every other major industry. Locally, it is a large contributor to employment and a major source of revenue for the state. In fact, Loudoun County has the highest median household income in the US, with nearby Fairfax county trailing closely behind.

The Virginia state government was able to recognize this potential and played a major role in the development of Data Center Alley. In 2014, the Data Center Zoning Ordinance was approved to allow the construction of new data centers in more districts as long as they adhere to the design guidelines. With the high demand for strategic positions on the map, multi-story data facilities are encouraged to maximize space. Loudoun County also began offering the Fast-Track Commercial Incentive Program. The initiative provides a dedicated project manager and gives data center projects priority on the development review list. It also facilitates tax exemptions for data centers that meet their criteria.

Powering Data Center Alley

The final element making Northern Virginia attractive for data centers is its power. Dominion Energy is the main power utility provider to the region. It provides about 1 Gigawatt of reliable, low-cost energy throughout northern Virginia. This availability of stable power in combination with the fiber infrastructure and government support is essential to the ever-expanding data center space.

What’s Next for Data Center Alley

Datacenter developers are already preparing for the next phase of cloud growth. New sectors such as artificial intelligence, virtual reality, and the Internet of things will all be heavily reliant on data center and IT infrastructure development. This means that the largest data center market in the world will continue to expand its lead. To keep up with demand, Loudoun county’s Economic Development Department selected 43 potential sites for Data Center Alley’s next phase of growth. Still, even this development may not be sufficient to support the rapid growth of the industry.

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