US state of Virginia has more datacenter capacity than Europe or China

Welcome to Datacenter Alley, where you'll find the backbones of Microsoft, Facebook, Google, ByteDance...

The state of Virginia has over a third of America's hyperscale datacenter capacity, and this amounts to more than the entire capacity of China or the whole of Europe, highlighting just how much infrastructure is concentrated along the so-called Datacenter Alley.

These figures come from Synergy Research Group, which said that the US accounts for 53 percent of global hyperscale datacenter capacity, as measured by critical IT load, at the end of the second quarter of 2022. The remainder is relatively evenly split between China, Europe, and the rest of the world.

While few would be surprised at the US accounting for the lion's share of datacenter capacity, the fact that so much is concentrated in one state could raise a few eyebrows, especially when it is centered on a small number of counties in Northern Virginia – typically Loudoun, Prince William, and Fairfax – which make up Datacenter Alley.

Amazon in particular locates a large amount of its datacenter infrastructure in Northern Virginia, with Microsoft, Facebook, Google, ByteDance, and others also having a major presence, according to Synergy.

"Hyperscale operators take a lot of factors into account when deciding where to locate their datacenter infrastructure," said Synergy chief analyst John Dinsdale.

"This includes availability of suitable real estate, cost and availability of power supply options, proximity to customers, the risk of natural disasters, local incentives and approvals processes, the ease of doing business and internal business dynamics, and this has inevitably led to some hyperscale hot spots."

Synergy's research is based on an analysis of the datacenter footprint of 19 of the world's major cloud and internet service firms, which covers the largest operators in SaaS, IaaS, PaaS, search, social networking, e-commerce, and gaming.

The big three cloud providers – Amazon, Microsoft and Google – have the broadest hyperscale bit barn footprint, with each of these having over 130 datacenters of the 800 or so around the globe.

When measured in datacenter capacity, the leading companies are Amazon, Google, Microsoft, Facebook, Alibaba and Tencent, according to Synergy.

Outside the US, the relatively isolated Chinese market boasts the majority of the datacenter infrastructure of Chinese outfits like Alibaba, Tencent, and Baidu.

In Europe, the top locations for hyperscale infrastructure are Ireland and the Netherlands, two countries that have relatively small economies but have been heavily favored for locating hyperscale datacenters, often because of the incentives they offer.

"The Netherlands and Ireland have always punched far above their weight, beating out countries with larger economies like Germany and the UK," said Dinsdale.

"But globally, the standout region is the US state of Virginia. Virginia has far more hyperscale datacenter capacity than either China or the whole continent of Europe."

This concentration of vast bit barns in a few localities can have bad as well as good consequences.

In Virginia, new datacenter projects have started to run into opposition over land use and concerns over water quality, while a report in July claimed that the region did not have enough power transmission capacity for all of the planned builds.

In Ireland, South Dublin County Council put a ban on any further bit barns being built within its boundaries in June. Concerns were raised that datacenters are having a major impact on the Irish electricity network and the country could face "rolling blackouts" if the growing demand was not addressed.

But this situation may only be short-lived, according to Dinsdale, who said that Synergy expects bit barns to become more widely distributed.

"Our analysis of the future datacenter pipeline shows that the relative importance of these hot spots will tail off a little over the next five years, as hyperscale infrastructure permeates a broader geographic footprint," he said. ®

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