Florida has emerged as a major hub for data centers in recent years. The state offers an attractive location for data center operations due to its business-friendly policies, availability of renewable energy, fiber connectivity, and climate. This article provides an overview of the growth of data centers in Florida, examining the major hubs, operators, incentives, and outlook for the industry.
Growth of Data Centers in Florida
Florida has become an increasingly attractive location for data centers in recent years. According to Powering Florida, Florida is the 3rd fastest growing state for high-tech employment and 4th in the country for number of data center locations (Powering Florida). There are several factors driving the growth of data centers in Florida:
Tax incentives – Florida provides attractive tax incentives to companies building data centers in the state, including sales tax exemptions on equipment purchases.
Climate – Florida’s warm climate means lower costs for cooling data center facilities.
Connectivity – Florida’s proximity to undersea fiber optic cables linking North and South America provides excellent connectivity.
Renewable energy – Data centers in Florida can take advantage of the state’s abundant solar energy resources.
With major tech companies like Amazon Web Services, Microsoft Azure, and Google Cloud locating data centers in Florida, the state is positioned to see continued data center growth and expansion.
Major Data Center Locations
Florida has several major data center hubs located throughout the state. Some of the top markets include:
Miami – Miami is one of the largest and fastest growing data center markets in Florida. Its proximity to undersea fiber optic cables that connect to Latin America make it an ideal location for international data connectivity. Major companies like Equinix, Terremark, and Telefonica operate large data centers in the Miami metro.
Tampa – The Tampa Bay area has attracted investment from data center operators like AirTrunk, Compass Datacenters, CyrusOne, and Hurricane Electric. Tax incentives and affordable power prices help make the region cost competitive.
Jacksonville – Jacksonville has benefited from tax breaks aimed at the data center industry. Companies with major operations in Jacksonville include IPI Partners and Compass Datacenters.
Major Data Center Operators
Florida is home to data centers run by some of the largest providers in the world. Key operators with a presence in Florida include:
Equinix – Equinix has 10 data center locations across Florida, including major facilities in Miami, Fort Lauderdale, Orlando and Tampa. Equinix’s MI3 facility in Miami is one of the largest carrier-neutral data centers in southern Florida.
CenturyLink – CenturyLink has over 250,000 square feet of raised floor space across two facilities in Lakeland and Tampa. The company has invested significantly in its Florida data centers in recent years.
Florida LambdaRail – Florida LambdaRail (FLR) operates a high-speed fiber optic network connecting major cities and research universities across Florida. FLR enables advanced network services for organizations with high bandwidth requirements.
Tax Incentives
The state of Florida offers attractive tax incentives to encourage companies to build data centers within the state. In 2021, Florida extended the sales tax exemption on data center equipment and electricity until 2040 (Source). This exemption eliminates sales tax and use tax for data centers, infrastructure, equipment, personal property, and electricity. The extension made Florida more competitive with other states also offering data center sales tax exemptions.
Florida does not have a property tax or data center-specific tax incentives like some other states. However, the sales tax exemption on equipment and electricity provides a significant tax advantage. Companies investing over $250 million in data centers can receive additional tax refunds. Overall, the tax incentives make Florida an affordable option for data center development and operations.
Renewable Energy
Florida has abundant renewable energy sources that data centers can utilize. According to the U.S. Energy Information Administration, Florida ranked 3rd in the nation for solar electricity generation in 2021, producing over 10,000 gigawatt-hours from solar panels (Source). The state has ideal conditions for solar power with high levels of year-round sunlight. Major data center operators like Amazon Web Services and CyrusOne have installed large solar farms to power their Florida data centers in a renewable manner (Source).
Besides solar, Florida also has opportunities for wind, biomass, and hydroelectric power. However, solar remains the predominant renewable resource for data centers in the state given the economics and abundant potential. With data centers consuming vast amounts of electricity, the transition to solar and other renewables is crucial for meeting sustainability goals.
Connectivity
Florida is considered one of the top connectivity hubs in the United States due to its location and infrastructure investments. The state has major fiber networks and connectivity infrastructure to support its growing data center industry. Major data centers are located near network access points (NAPs) and carrier hotels that serve as connection hubs for national and global networks.
According to DataCenterMap, Miami is one of the largest NAPs in the country with over 50 carriers and ISPs available (https://www.datacentermap.com/usa/florida/). Miami has become a strategic hub for subsea cable networks connecting to Latin America and beyond. Major subsea cables that land in Florida include Marea, BRUSA, AMX-1, and Monet.
Other key connectivity infrastructure includes terrestrial backbone networks like FiberLight, FPL FiberNet, and Crown Castle. These fiber networks crisscross the state to provide high capacity connectivity between major markets. Data centers operated by Equinix, Interxion, NAP of the Americas, Terremark, and others take advantage of this robust fiber infrastructure.
The connectivity infrastructure in Florida supports high bandwidth, low latency connections to support today’s applications and emerging technologies like 5G, cloud computing, and IoT.
Cybersecurity
Florida has made cybersecurity a top priority in recent years. The state has established the Florida Digital Service (FDS) to oversee cybersecurity for government agencies. FDS runs a state-of-the-art Cybersecurity Security Operations Center (CSOC) that monitors digital assets 24/7 https://digital.fl.gov/cybersecurity/. The CSOC uses advanced threat detection and analytics to identify and respond to cyber threats in real-time.
Florida also has a dedicated State Data Center that sets cybersecurity standards for government data centers per Florida statute 282.0051 https://www.dms.myflorida.com/other_programs/state_data_center. All government data centers must comply with stringent physical and network security requirements. The State Data Center partners with the Florida Cybersecurity Advisory Council and Florida Digital Service to implement best practices.
Florida encourages public-private collaboration on cybersecurity. The Florida Center for Cybersecurity at University of South Florida brings together academia, government, law enforcement, military and private industry. The center provides cybersecurity education, training and research. Florida also offers grants to improve local government cybersecurity through the Florida Infrastructure Protection Center Grant Program.
Challenges
Florida’s climate and geography pose some unique challenges for data centers in the state. One major issue is the threat of hurricanes and tropical storms. According to Floridia Data Centers Brace for Powerful Hurricane Ian, Florida data centers take extensive precautions to prepare for major storms. Steps include testing and fueling backup generators, stockpiling fuel and supplies, securing equipment, and reviewing emergency plans. Flooding is also a risk during major storm events. Locating data centers away from flood zones and implementing flood mitigation strategies are important in Florida.
Construction costs for building and operating data centers in Florida can also be quite high, as noted in this article about a new Eatonville data center. Factors like supply chain disruptions, inflation, and strong demand have driven up development costs substantially. While tax incentives help offset expenses, running an efficient, cost-effective data center in Florida requires careful planning and financial management.
Future Outlook
The future looks bright for continued data center growth and development in Florida. According to HostDime, Florida will see over $2 billion in data center investments in upcoming years, with millions of square feet planned for facilities across the state.
Major developers like Compass Datacenters, CyrusOne, and EdgeCore are all working on expanded and new data centers in Florida. HostDime itself has a large new facility planned for Orlando that will be one of the most well-connected data centers in the state when completed in 2023 (https://www.hostdime.com/new-orlando-data-center/).
Areas like Jacksonville, Tampa, and Miami are also primed for more data center construction. The great climate, business-friendly policies, robust infrastructure, and abundant renewable energy sources position Florida as an ideal location for continued data center investment.
Industry experts predict Florida’s capacity will need to double in upcoming years to meet demand. As more businesses rely on cloud computing and need expanded IT infrastructure, Florida’s data center landscape will continue evolving and expanding.