CheckFree Plans Austin Data Center

CheckFree Corporation has purchased 14 acres of land at the MetCenter business park in Austin, and plans to use the land to build a 210,000 square foot data center. CheckFree, which was acquired this week by FiServ (FISV) for $4.4 billion, provides electronic billing and payment services that are used by more than 3,000 financial services web sites.

The CheckFree project was announced by Zydeco Development, which is seeking to develop much of the remaining space at its huge MetCenter business park as a data center campus. Zydeco said Tuesday that it was launching the second phase of development at MetCenter, and has broken ground on a 150,000 square foot industrial building to kick off the expansion.

In early 2006 Zydeco announced plans for a large data center park within MetCenter. The 550 acre MetCenter campus includes 2 million square feet of developed commercial space. Companies with existing data centers at MetCenter include Digital Realty Trust (DLR), DataFoundry, Waste Management and Progressive Insurance.

The Texas Data Center Phenomenon

The state of Texas has been a major player in the data center boom. The first wave of growth was driven by the success of the state’s many dedicated hosting companies, including The Planet, EV1Servers, Rackspace, C I Host, SoftLayer, Layered Technologies and VeriCenter, among others. In the past several years, Texas has become the hot spot for stand-alone enterprise data centers attracted by the fact that the state had its own power grid and cheaper electricity than other major Internet markets.

The growth has established a number of Texas cities as destinations for data center site location, which in some cases are now battling one another for new projects. Here’s a look at the Texas data center map and recent developments for Austin, San Antonio, Dallas, Houston and El Paso.

DALLAS
The early growth of the Telecom Corridor in Richardson helped put the Dallas market on the map for data center development. Around the same time, the Infomart was evolving into a major carrier hotel. The city has also benefited from the growth of a vibrant crop of web hosting companies, including The Planet, C I Host, DataSide (Collocation Solutions), SoftLayer, Layered Technologies and Colo4Dallas.

While Dallas is the most mature of the state’s data center markets, it continues to attract new projects, including a planned 1 million square foot data center campus in Richardson by Skyrise Properties, which also recently bought a Ft. Worth data center from Hillwood Development Company. Behringer Harvard recently bought a facility in Arlington.

AUSTIN
The capital city snared one of the largest enterprise data center projects when Citigroup chose Austin for a $450 million facility in Georgetown. It is the latest in a series of corporate stand-alone data center projects the region has attracted. Hewlett-Packard is building two major facilities in Austin, while Lowe’s has a $126 million data center in the works. That’s in addition to Zydeco Development’s proposed data center park and plans by Digital Realty Trust to expand its Austin facility.

PayPal Plans Austin Developer Center

Economic development officials in Austin are smiling tonight after PayPal’s announcement that it will locate a technology development center in the Texas capital city. PayPal Data Services will hire up to 300 developers for the 37,000 square foot Austin facility, to help build the huge payment service’s global payment platform. Some early reports stated that the project was a data center, but Paypal’s Amanda Pires clarified that the Austin site will be an office for developers, with no plans to include any data center space. Though it won’t increase the region’s data center footprint, the center is a huge employment booster.

“Austin is well-known for its strong pool of well-educated, talented professionals with the right level of expertise in technology and ecommerce,” said PayPal vice president of core technologies, Matthew Mengerink. “The area’s reputation as a great place to live and work makes it an ideal location for our center.”

Citigroup Hiring for $450M Austin Project

Citigroup Inc. has begun advertising for IT staff for its $450 million data center project in Georgetown, Texas, a suburb of Austin. The financial services expects to hire 50 people at an average annual salary of about $70,000 for the facility, which is being built on a 55-acre site on the SE Inner Loop. Citigroup began searching locations in the Austin area last fall, and purchased the Georgetown site in January after considerign several other Austin-area locations. Bourn Partners LLC is the project developer.

Citigroup is advertising for an operations and facility manager and a delivery team manager for the Georgetown site. The company has posted the jobs at Diversity Inc. and LatPro, a job board for Hispanic and bilingual professionals, as well as the Citigroup web site.

Microsoft Texas DC Project Now $1 Billion

In June we noted that Microsoft is considering sites in Texas for a major data center, with San Antonio and Austin in the running. At the time the reported price tag for the project was $600 million. Local media reports have updated the story this weekend, with Microsoft confirming it is “looking at San Antonio for a potential future operations facility. We are still working on our plans in San Antonio so we do not have detailed information to share at this time.”

Of greater interest: the price tag on the project has now risen to $980 million, up nearly $400 million from the original estimates from June. The size of the project - 470,000 square feet - hasn’t changed, either. What’s up with the cost estimate? One possibility is that the original cost estimate of $600 million was incomplete. Another possibility is that the cost is rising along with projected power and cooling costs. At least one other company developing new data centers has experienced this.

IBM Deal Is Latest Project for Austin Market

IBM will build a 36,000-square-foot data center in Austin by June 2007 as part of an $863 million contract to consolidate information technology operations at 27 state agencies, state officials said Tuesday. Most of the media coverage of IBM’s customer win has focused on the enormous size of the project. But it also underscores the emergence of the Austin area as a white-hot market for data center development.

Here’s a summary of data center projects either proposed or finalized in 2006:

• Hewlett-Packard is building two large facilities in Austin as part of its huge data center consolidation project.consolidation.
• Zydeco Development announced plans for a 350 acre data center park in Austin.
• Digital Realty Trust bought two properties at Met Center Business Park in Austin, near Austin-Bergstrom International Airport. One is a fully-leased 45,000 square feet data center, and the other is a 75,000 SF empty facility slated for redevelopment.
• Microsoft began scouting sites in both Austin and San Antonio for a $600 million mega-data center.
• Citicorp is looking at sites in the Austin area for a $475 million data center project.

The exact site of the new state data center is not being disclosed, but data center will include tightly guarded space where 17 mainframe computers operated by the agencies will be consolidated into six and where about 1,200 servers will replace about 5,500 that are now spread statewide.

Citigroup Eyes Austin for Huge Texas Data Center

Citigroup is scouting several sites in the Austin, Texas area for a $475 million data center, according to local media. The huge bank’s interest reinforces the status of the Austin market as one of the hottest areas for new enterprise data centers. Hewlett-Packard has committed to build two major facilities in Austin, which is also on the short list for a huge Microsoft data center project. That’s in addition to Zydeco Development’s proposed data center park and plans by Digital Realty Trust to expand its Austin facility.

Citigroup is considering a site in Georgetown in the northern suburbs of Austin, and working with local officials on potential incentives. The Georgetown City Council is said to be preparing a package that would include property tax abatements for 10 years. “We feel good about it, but until that package is completely done, it’s not a done deal,” Georgetown Economic Development Director Mark Thomas told KXAN-TV.

Austin to Assist New Orleans With Backup Site

It would seem odd that nine months after Katrina and a month into this year’s hurricane season, the city of New Orleans doesn’t yet have a backup data center lined up to provide remote recovery of municipal operations and data in the event of another major storm. Apparently, that’s the case. Computerworld notes that the CIOs of Austin and New Orleans met last week to work on plans for a data center in Austin that would keep New Orleans municipal functions running in the event of a natural disaster. The city of Austin is providing the space at minimal cost. Work is expected to be completed within 60 days, said Pete Collins, Austin’s CIO, who met with New Orleans CIO Greg Meffert in Austin. Collins wouldn’t disclose the location of the data center.

The story says that “New Orleans approached Austin officials about four weeks ago to discuss the plan.” That seems an awfully late start, but New Orleans officals had considered other locations or even building their own center before reaching the deal with Austin, according to the Austin American Statesman. The city considered and rejected Houston; Atlanta; Jackson, Miss.; and Baton Rouge and Lafayette, La. as backup locations, Meffert said.

Microsoft Eyes Texas for $600M Data Center

Microsoft is exploring sites in Texas for a 470,000 square foot server farm that could cost as much as $600 million to build, according to local media reports. San Antonio and Austin are in the running for the massive facility, according to the San Antonio Express Times, which cited local real estate and economic development sources.

“People close to San Antonio’s talks with Microsoft said its site-selection staff likes the area’s inexpensive electrical power, work force and lack of exposure to natural disasters,” the paper reported. Real estate firm Jones Lang LaSalle is said to be working on Microsoft’s behalf and looking in the Westover Hills area of San Antonio.

Digital Realty To Build Out Space in 10 Cities

Technology landlord Digital Realty Trust (DLR) said today that it will launch a large-scale project to redevelop data center space it owns in 10 major U.S. markets. The investment represents a huge vote of confidence in the data center market amid growing demand for premium space. It also allows Digital Realty to capitalize on data center space shortages and rising prices in major Internet cities.

Demand for data center space is growing along with the Internet economy. As television and movie content moves to a digital delivery model, an enormous volume of digital files will need to be stored in data centers to provide “always on” high-speed access. Meanwhile, Microsoft, Google and Yahoo are planning huge infrastructure expansions to deliver online services and applications.

Doigital Realty’s redevelopment projects will create more than 330,000 square feet of advanced data center space, with approximately 40 megawatts (MW) of available UPS load. Sites selected for development include Digital Realty Trust facilities in Northern New Jersey, Boston, Philadelphia, Charlotte, Atlanta, Chicago, Austin, Dallas, Los Angeles and San Francisco.

“Demand for high-quality datacenter space has been strong in each of these ten cities, which makes the timing of these redevelopment projects ideal,” said Chris Crosby, Senior Vice President of Sales and Technical Services at Digital Realty Trust. “Each of these datacenter spaces will offer the world-class technical capabilities that Digital Realty Trust facilities are known for, including outstanding electrical power availability - an increasingly rare commodity in the technology real estate market.”