Will Houston become a data center hub? CBRE first VPs Matt Dickson (above) and Ron McWherter tell us we may never be a primary market for out-of-town companies, but local firms are increasingly choosing to use Houston colocation data centers. Here’s why.

1) More Development

Ron and Matt are tracking 1M SF of data space under construction with 160 megawatts of critical load. (That includes Data Foundry’s campus.) New players (like Skybox—we snapped its groundbreaking below; it expects to announce a deal by its December opening) are developing in Houston, which not only gives users more availabilities but makes pricing more aggressive.

2) Cheaper to Co-locate

Matt says they recently helped an energy company evaluate building a data center within its office space and then looked at Austin, Dallas, San Antonio, and Houston for active and backup data centers. It would’ve cost $750k in capital upgrades within its lease, but it only cost $650k for a five-year lease at a colocation facility in Houston with significantly better infrastructure and a backup data center in another Texas market. Going colocation here helped the firm eliminate capital costs, control opex, define risk, and provide much better redundancy.

3) Improving Environment

People are worrying less and less about our geography, floodplain, and hurricane risk. Matt and Ron point out that West and Northwest Houston are 60 miles from the coast. Companies are getting more comfortable with that, especially with advances in building technology. (Above is Stream's private data center.) As Matt says, if they can have data centers in Florida, we can have data centers in Houston. (Can we have Gloria Estefan, too?) Second, Matt says Houston’s tech reputation is increasing. The energy sector has always been tech-heavy, but now the industry is welcoming new startups with niche focuses. An example of our tech growth is SURGE, an incubator for energy startups. It brings companies here for four months, providing access to capital, expertise, and “the global energy ecosystem.”