The Guide to Data Center Selection for Texans

From its independent power grid to centralized location, here are the main decision considerations in data center site selection for Texas facilities.

Across the globe, the data center industry is experiencing exponential market demand that’s only expected to continue rising. In fact, the industry is anticipating growth of around $90 billion by 2024.

Further, when you look at the United States, Texas has widely established itself as one of the premier data center markets, with Dallas in particular consistently ranking in the Top 3 markets for annual absorption (according to CBRE). With large amounts of resources being continuously invested at both the local and state level, the Lone Star State deserves this gold-status recognition.

So, what makes Texas so well equipped for enterprise and colocation data centers? Historically, data centers have long been attracted to the state due to the region’s easy accessibility and much lower risks of catastrophic natural disasters compared to other parts of the country.

As the data center landscape matures, operators and customers are placing a higher value on the state’s propensity to foster business growth at a lower cost of operations.  As we rely further on Content Distributed Networks, Texas will become even more important as the state’s centralized location serves as a natural landing hub for the long-haul and short-haul fiber providing robust connectivity to Texas Metroplexes, North American Cities, and Mexico.    

Texas’ unique power advantage provides enterprise, cloud, & colocation users with a robust, dedicated and reliable power supply. Mix in the added benefits of deregulated power markets and statewide tax incentives, you have a recipe for companies moving their IT infrastructure to Texas, further driving the total cost of operations lower. 

Data center site selection is comprised of an interconnected matrix of considerations. CTOs and IT managers alike are continually evaluating risk, opportunity, and infrastructure. Below we explore three key areas of data center site selection: power, location, and economic climate.


It’s important to note that when compared to other popular data center markets, Texas operates with a unique cost advantage. The majority of the state’s electric power comes from  ERCOT, an independent power grid solely used by Texas. Thanks to an abundance of renewable energy (wind and solar) and natural gas generation, data centers have unmatched access to power at a significant discount compared to other states. Not only that, but thanks to its deregulated energy sector, consumers have more flexibility in choosing their power provider based on their specific needs.

For those unfamiliar with power grids, the U.S. currently has three interconnected grids total: The Eastern Grid, the Western Grid, and the Texas grid. By implementing a state-wide power grid, the Electric Reliability Council of Texas (ERCOT) is able to provide fast, reliable power to its users at an extremely low cost. In 2018, the ERCOT grid reached record-breaking transmission, supplying more than 73,000MW to its 25 million+ customers.


While not all of Texas is exempt from natural disasters, or the winds and rain sometimes accompanied by them, its predominantly flat geography and generally natural disaster-free landscape has helped paved the way for bustling metroplexes (and data center hubs) like Houston, Austin, San Antonio, Ft. Worth, and Dallas. 

While major markets like Dallas and San Antonio are situated well away from the coast, even the semi-coastal Houston market offers proven, data center assets well above 500-year floodplains. Each city features unique geography that provides developers, operators, and enterprises the opportunity to hone in on site selection, design-build process and planning MOPs/SOPs for the unexpected.    

Looking beyond weather-related factors, many of the world’s most well-known and established data center architects, developers, general contractors, electrical/mechanical firms and vendors are proud to call Texas home. Years of proven expertise drives down costs and allow users peace of mind knowing their facility is uniquely designed to accommodate potential hazards or reliability issues that may arise in their respective markets.

Economic Climate

The Texas Triangle (Dallas, Houston, Austin, and San Antonio) is expected to reach nearly 24 million people by 2030. To put things in perspective, this anticipated growth target is equivalent to adding the populace of Minneapolis-St, Paul, MN to the state over the next 10 years. In case you want one more stat for the water-cooler, 24 million people located just in the Texas Triangle (by 2030) is 1.2 million less than the state’s total population in 2010!

Thanks to the increased presence of small to large enterprises in energy, oil and healthcare industries, Texas has fostered a highly-skilled, high-tech workforce with jobs to match. Competing with California and New York for the largest number of Fortune 500 companies, Texas—specifically Houston and Dallas—and its IT-driven culture supplies a stable economy and a steady need for enterprise and colocation data centers.

This growing demand for data centers isn’t without incentives. The state offers unique benefits and tax breaks for data facilities that meet certain qualifications, something other U.S. markets don’t offer.

At Skybox, our data center facilities are purpose-built and designed to match the specific needs of our customers by market, yielding reduced costs and a content IT staff. Each facility is situated close to neighboring substations to ensure continuous, reliable power as well as offering additional support as each facility and its customers grow.

To learn more about our data center colocation and build to suit services, visit our website or contact us today!