Data center acquisitions have been picking up the pace lately to meet the increasing demand for outsourced IT services. As Americans become increasingly dependent on the internet and mobile phones, the demand for server space to process data has become endless. This makes Dallas a prime location for investment and growth.

As investors seek to expand their footprint, the Dallas data center market has also seen a significant amount of growth.

In North America, Dallas, New York, Los Angeles, Chicago, the Bay Area, and the Northern Virginia suburbs are the hot spots for data centers. This is because there is a large concentration of network connectivity and data center inventory in these areas.

As a result, data centers that seek national dominance will also have to grow their footprint in these regions.

Middle Markets

A common trend in the data center market is the fact that there’s a lot of consolidation going on and a lot of new entrants are trying to grow their national footprint by acquiring companies.

The trend seems to indicate a practice of cultivating the middle markets to drive growth.

For example, Fortune Data Centers and Dallas Infomart merged their assets under a single company, which then purchased a former AOL data center in Ashburn, Virginia.

As a result, data centers in the Dallas market are not focused locally anymore, they’re growing across the country.

TierPoint is another company attracting investors as the company has purchased a 50,000-square foot data center where they’re offering cloud-based services.

Although their attention is shifting to Tier 2 markets, they are still growing a significant footprint in Dallas. They are able to grow as a result of a new group of investors backing the company’s strategy of Tier 2 market consolidation. The company is now in the process of integrating all of its data centers into a single platform to create a standard for infrastructure, billing, accounting, and ticketing.

Some of the other players attracting investors in the Dallas data center market are CyrusOne, Legacy Telecom Facilities, and Digital Realty’s 2323 Bryan data center that’s located in downtown Dallas.

With significant investment coming into data centers, the future looks more than promising.

Industry Giants in Texas

Recently, Facebook signed a billion dollar deal for a 750,000-square-foot data center in Fort Worth which will probably be the largest investment in the state. This is the end result of years of aggressive recruitment of data centers by municipalities in North Texas.

Cisco Systems also has a data center in Richardson that’s worth approximately $122,829,796, earning the city and county more than $11 million a year in tax revenue.

Although the area is already home to about 18 data centers, this number is expected to keep growing.

Illinois-based insurer State Farm is also expected to enter the Dallas data center market with plans already submitted to build a data center.

Cities Love Data Centers

The Dallas data center market is not only a suitable place for investment because of the growing need for data centers in the area, but also the incentives provided by the city of Dallas to move there.

Data centers don’t cause much trouble when compared to factories and other industrialized mechanisms. These are low noise and low pollution businesses that can really help generate revenue not only for the city but the state as a whole.

The state passed a measure offering 10- and 15-year exemptions from sales and use tax for any data center investment of over $200 million (over 5 years).

However, it seems like Facebook will be the first company that will qualify since the state passed this rule back in 2011.

Has your company expanded into the Dallas market? Let us know about your experience in the Comments box below.

And if you’re responsible for generating new client revenue and growing a data center in Dallas, be sure to download your free copy of “Lead Generation Best Practices for Colocation Data Centers.”