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I'm 99% sure you're right. I ran a dedicated server/colo hosting company for 6 years. Texas is favored for the following reasons:

Cheaper energy

Cheaper real estate

No earthquake retrofitting of datacenters

Low ping times to Midwest vs. California

Cheaper employees; less biz liability insurance required

No state income tax

Honestly, many of these are the same reasons I ended up moving to Texas after I sold my hosting company (which was based in San Jose.) I run a business here now with 15 employees and it's significantly cheaper to run it here vs. California. As a side benefit, I can also afford to own a nice house with a yard my daughter and dog can play in in a great area of Austin for about 1/5 of what it would cost in San Jose.



No earthquake retrofitting yet... the Barnett Shale largely sits below Dallas/Fort Worth, and there's a lot of data center storage in the DFW area. That area is already becoming more seismically active.


Plano (ie tons of corporate-managed DCs) and San Antonio (ie Rackspace and so on) have tons of massive DCs.


> Low ping times to Midwest vs. California

Why is reaching the Midwest so important?


In particular, the Dallas-Fort Worth-Arlington MSA and the Houston-The Woodlands-Sugar Land MSA are the 4th and 5th largest in the USA, are the fastest growing in the nation, and combined are about as big as the Los Angeles-Long Beach-Anaheim MSA (which is #2).

The Chicago market (which is also very well served by Texas due to an almost direct link to DFW's Infomart, but also has a strong DC market) is the Chicago-Naperville-Elgin MSA, and is #3 on the list, and is slightly larger than Dallas and Houston's MSAs.

The three combined are 23.5 million people, and just the 3 biggest metros to note, and about a third of the people covered in the midwest. California's ping and the ping from DCs serving the Northeast (NYC MSA is #1, DC/MD/VA MSA is #6, PA/NJ-outside-of-NYC MSA is #7, Boston-Cambridge MSA is #10) is just too high for a lot of use cases.

I dunno about you, but I'm not going to tell about a third of the US population I can't serve them. There is a United States outside of California and NYC.

Edit: For completion's sake, #8 is Miami-Fort Lauderdale-West Palm Beach, #9 is Atlanta-Sandy Springs-Roswell (which both of those also are served decently by DFW, but also by DCs in VA) and the 10 largest MSAs together is about 85 million people, or about 26% of the US's population.


> Why is reaching the Midwest so important?

Because it has $3.5 trillion in GDP, and a $55,000 GDP per capita. That's larger than the economy of Germany, with a 40% higher GDP per capita. It's nearly equivalent to the combined economies of France and Russia.




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