Life on the Edge: Data Centers Sprout Up Away from Major Metros

Demand remains strong in top data center markets across the world. You know the usual suspects: New York City, London, Chicago, Silicon Valley, Dallas. But unexpected locations are becoming more and more desirable for data center facilities, with demand growing in tier-two markets like the Pacific Northwest, but also in edge locations closer to the end user.

An “edge” location used to be limited to so-called tier-1 cities – those mentioned above, plus Chicago, Los Angeles, and other major metropolitan centers. Now it has expanded to tier-2 cities like Denver, Minneapolis, and yes, even Cheyenne, WY.

The definition of edge locations has been somewhat contentious. One NetworkWorld article states that 50% of local broadband users should be passing through the data center. I’m not sure that’s critical, but another point brought up in that piece is that peering traffic should now transfer through the local data center, along with measurable cost and performance benefits. Now that hits the nail on the head.

Regardless of the exact definition, the growth of data centers in smaller market is tied to those gains in cost savings and performance, as well as attractions like lower energy prices, tax incentives, and proximity to broadband.

Traditionally, locating in the middle of the US might have just been a disaster recovery play – move your backup site further out from the likely epicenter of a disaster. As 100 Gbps fiber continues to proliferate across the country, fast connections are making their way into homes even in far flung regions. That means latency isn’t as important as it used to be, and for applications where it is vital, like streaming, service operators can move services and apps closer to the end user, even dynamically.

CBRE reports have discovered the least expensive markets to lease data center space are often in edge locations, including Portland, Seattle, Salt Lake City, Colorado Springs, and Houston.

Ultimately, cloud providers and other content hosts need to serve information from cities that are near their users. Outside of Green House Data’s home of Cheyenne, there is increased activity in spots like Akron, OH.

Secondary markets have seen their own explosion in population and demographic shifts. Denver has had 100,000 people move into town in the past five years. Construction is increasing. Downtown areas are being revitalized in Kansas City. And along with users comes business and infrastructure.

Part of the growth is also driven by obsolete technologies currently in place. Local businesses that were forced to build their own data centers ten or twenty years ago are now facing upgrades, but data center providers are moving in to meet their needs.

Edge markets aren’t without their benefits for primary tier-1 markets, either. Companies like Sony might need edge data centers in order to stream games with lower latency to users across the country. Offering “single-hop” connectivity means traffic can transfer through just one other data center or interchange before reaching its destination point—a major way to cut down on lag for streaming and latency-dependent applications.

Would you consider hosting your systems closer to the edge? What other advantages or disadvantages do tier 2 markets face? Sound off on Twitter @greenhousedata or comment on our LinkedIn page with your thoughts.