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WHITE PAPER
A Site Selection Web Exclusive, March 2015
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Gateways for Growth

The numbers and the projects point to data center opportunity in Florida.

WHITE PAPER
Better data begets better data center performance. Throughout its 35-county service territory, FPL has upgraded the electrical grid with the installation of more than 4.7 million smart meters and 11,500 intelligent devices.
Photo courtesy of FPL

by ADAM BRUNS
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When Peak 10 in June 2014 announced its third colocation data center in Tampa, Fla., it brought the company's Tampa footprint to 129,000 sq. ft. and its Florida footprint to roughly 230,000 sq. ft. “This facility will meet hurricane weather ratings for the Tampa region, making this a very sound facility for the IT business community,
When Peak 10 in June 2014 announced its third colocation data center in Tampa, Fla., it brought the company's Tampa footprint to 129,000 sq. ft. and its Florida footprint to roughly 230,000 sq. ft. “This facility will meet hurricane weather ratings for the Tampa region, making this a very sound facility for the IT business community," said David Jones (pictured), president and CEO of Peak 10.
Photos courtesy of Peak 10

ike clockwork, clouds threaten nearly every sunny summer afternoon in some parts of Florida. But cloud services — and mission-critical facilities in general — are an opportunity shining continually on the state.

According to Data Center Map, there were 84 colocation data centers in Florida as of spring 2015, led by 25 facilities in the Miami area and 18 in Tampa.

Those are only a small slice of the nearly 3,600 colocation centers the research firm has tracked worldwide. But they're significant, as Florida's tally ranks fourth in the nation behind (in order) California, Texas and New York.

Pretty good for a state where hurricanes are always on the horizon — at least in public perception.

In fact, the risk mitigation that accompanies doing business in a severe weather zone has only served to strengthen the sector — as well as strengthen the facilities themselves.

Florida can’t exactly offer ambient-air cooling for the servers in those data centers. But it can offer something that might surprise: a risk rating of low to moderate for natural disasters, according to an internal research report commissioned by Florida Power & Light Co. (FPL), and even then only the sort that generally can be planned for.

“It’s not that difficult to design for hurricane-force winds or any other type of natural disaster,” says John Reis, New York Critical Facilities Practice Area leader for Syska Hennessy Group, Inc. “It can be designed into the shape of the building, location or orientation to minimize the effects of wind.”

Look no further than Tampa, where Charlotte-based IT infrastructure and cloud services provider Peak 10 broke ground in June 2014 on a new 60,000-sq.-ft. data center near the booming University of South Florida campus. It's Peak 10's first facility designed and constructed completely from the ground up. It brings the company's Tampa footprint to more than 129,000 sq. ft. across three separate facilities, and Peak 10’s total Florida footprint to roughly 230,000 sq. ft.

"This facility will meet hurricane weather ratings for the Tampa region, making this a very sound facility for the IT business community," said David Jones, president and CEO of Peak 10, noting the redundancy new facility adds to the company's local and national footprint.

'Next Level'

"Market proximity is of paramount importance to colocation facilities," says Lynn Pitts, FPL's director of economic development, noting a lot of colocation interest in multiple Florida markets, including Jacksonville. "Florida is home to 20 million people. It's a market of its own."

FPL continues building a stronger more resilient system to ensure better than 99.98-percent reliability, affordable and clean power for its 4.7 million customer accounts.

Site Selection's New Plant Database tracks private-sector facility investments of more than $1 million or which create more than 20 new jobs or 20,000 new sq. ft. In 2014, 51 data center investments met one of those criteria. In 2013, the tally came to 125, following 105 in 2012, 74 in 2011, 107 in 2010 and 109 in 2009.

That's nearly 100 projects a year in a very capital-intensive sector — a good quarry for any economic development effort, and a major reason why so many jurisdictions have developed special incentives to help attract them, most recently this spring in Missouri.

A Q4 2014 update on the sector from the CBRE Data Center Solutions Group identified the potential: "As a result of growth and investor confidence in the data center industry, many providers saw their market capitalization increase significantly in 2014, with the major providers averaging a 28.3-percent growth rate for 2014," said the report. "Momentum from lease renewals, new transactions and growing demand funnel we believe will continue to drive growth in 2015. "

The report cites Cisco’s Global Cloud Index: Forecast and Methodology, 2013–2018 (released in November 2014), which estimates that global data center traffic will increase 23 percent annually until 2018.

Florida, though not typically recognized among such primary data center hubs as Northern Virginia or Dallas-Fort Worth, has been at this game for a while: The state is recognized as one of the top five telecom hubs in the world. The Network Access Point (NAP) in Miami serves as a major switching station for Internet traffic coming to and from Latin America. Other high-speed networks, such as the Florida Lambda Rail and LA Grid, facilitate R&D efforts, while half a dozen submarine cables coming ashore along the state's eastern coast are cultivating clusters of colocation prosperity along roughly the same route Henry Flagler's original railroad followed when the state's economy first flowered.

“Within the FPL service area, there is a significant amount of fiber access. Couple that with their utility infrastructure, and I think you have a great combination for site selection within Florida.” 
Tim Comerford, senior vice president, energy services team, Biggins, Lacy & Shapiro

Michael Murphy is CEO of Boston-based NEF, one of the first dark-fiber-only agents in the United States, which maintains a proprietary database called Fiber Locator that keeps track of street-level fiber maps of about 300 carriers, long-haul metro and subsea lines, lit buildings and publicly known data centers. NEF’s customers tend to be large enterprise clients such as Digital Realty. Murphy says Jacksonville has been a “really hot” location for data center colocation activity because of the multiplying undersea cables. Digital Realty itself knows Florida well, and maintains two sites in FPL territory, in Miami.

As Florida has grown to be the third largest state, FPL has helped the state raise the level of its game, and in 2014 added to its toolbox a new negotiable rate, known as the Commercial Industrial Service Rate (CISR), for big power users such as data centers. In order to negotiate this rate, potential or existing businesses must, among other requirements, have a load of 2,000 kilowatts or greater, served by a single meter.

Pitts calls the CISR "the next level" for FPL economic development: “It will make us even more competitive,” she says, for companies on the hunt for strong infrastructure, reliability and redundancy.

Florida's critically acclaimed reputation for mission-critical facilities is not new, nor is it limited to colocation centers or hardware alone. Data centers can sometimes be a gateway investment for a company, opening out onto a vista replete with a skilled workforce, higher education assets and complementary industry clusters that can support other facility types.

They Know Risk

Risk mitigation is a specialty of New York–based Depository Trust & Clearing Corp. (DTCC), whose employees and subsidiaries automate, centralize and standardize the post-trade processing of financial transactions from facilities in 15 countries. In 2013, DTCC’s subsidiaries processed securities transactions valued at approximately US$1.6 quadrillion.

A decade ago, grappling with the aftermath of the Sept. 11 terrorist attacks and with the power blackouts of 2003, DTCC needed to decentralize from the Big Apple and find another power and telecom grid entirely. From a group of 25 cities in the Southeast, DTCC's team pared the list to three finalists that included Jacksonville.

FPL territory covers 35 counties that are home to more than 13 million people. The utility serves about half of the state's population. This map depicts data centers in FPL territory, some of which benefit from the utility's economic development rider (EDR), as well as undersea fiber cable landing points along Florida's eastern shore and the utility's newly certified data center sites (including a yet-to-be-named certified data center site in Greater Miami).

Ultimately they picked the Highwoods Preserve development in Tampa for a $34-million, 500-job operations center, and in 2013 announced a $4.8-million, 255-job expansion with average compensation of nearly $100,000. The investment will bring DTCC's total Tampa work force to 850 by the end of 2015, according to Eric Miller, managing director of the company in Tampa. The Tampa office of DTCC beat out competing company locations in New Jersey, New York, Dallas and Washington, D.C., for the expansion project.

The fact that DTCC's Tampa office started as a redundant operations center and now serves as a fully integrated business center is not lost on community leaders, nor on other companies that may be looking for locations that can foster talent as much as terabytes.

"Considering the track record that we have here and the talent pool we have seen, everything aligns perfectly for us here," Miller told Site Selection in 2013. "We are really so positive on the Tampa Bay region."

They're Certifiable

When Michael Rareshide, executive vice president of Partners National Real Estate Group (PNREG), worked with Cushman & Wakefield to help DTCC find the location in 2004, the requirement for a highly secure building in a safe location led his team to consider sites as far away as Clearwater, Lakeland and the massive Lakewood Ranch development just coming out of the ground in Manatee and Sarasota counties to the south.

Michael Murphy, CEO of NEF, says Jacksonville, Fla., has been a “really hot” location for data center colocation activity because of the new subsea cables landing there, in addition to others already there and the multiple cables coming onshore from West Palm Beach to Miami.

In March 2015, Lakewood Ranch happened to be one of three locations FPL named as pre-qualified data center sites. Biggins Lacy Shapiro & Company (BLS), a leading economics and site selection firm, was commissioned by FPL to conduct the study, reviewing a combination of factors to identify the most attractive sites for data centers in Florida. The criteria included reliable and redundant power, fiber infrastructure, competitive cost structures and locations insulated from man-made and natural risks. The sites are:

Florida Research Park, near West Palm Beach, offering 10 acres; zoning pre-approval for a 160,000-square foot building: The Florida Research Park is part of an industrial park with a total of approximately 900 acres.

Lakewood Ranch Corporate Park, offering 56 acres of undeveloped land and space to build a 100,000-sq.-ft. data center approximately 11 miles inland from the Gulf Coast. Lakewood Ranch Corporate Park (LRCP) is part of a mixed-use residential, commercial, industrial and agricultural real estate development with a total of approximately 31,000 acres.

Nassau Crossing Industrial Park, in northeast Florida near Jacksonville, offering 20-30 acres at 40 feet above sea level, and space to build 60,000-100,000 sq. ft. of data center. Nassau Crossing Industrial Park (NCIP) is part of an industrial park with a total of 197 acres.

“The BLS study has provided us with special insight in order to understand the unique needs of data center operators and how FPL can be a partner in helping these companies succeed,” said Crystal Stiles, economic development project manager for FPL. Since FPL began offering discounted rates for economic development in the state, 49 companies have signed up to participate, creating more than 8,000 jobs.

“Within the FPL service area, there is a significant amount of fiber access,” says Tim Comerford, senior vice president of BLS’s energy services team. “Couple that with their utility infrastructure, and I think you have a great combination for site selection within Florida.”

“We will likely expand the program in 2015 to four more sites, giving us great geographic diversity for data centers with varying requirements,” says Stiles. She says the menu of sites will also offer close proximity to those East Coast undersea fiber cable landing points (see map), directly connecting the state to Latin America and Europe.

Community Level

In the meantime, there is plenty of evidence the direct connections are multiplying every day.

  • Telx, a provider of global interconnectivity, data center solutions, and cloud enablement services, in late March announced that it has partnered with bpsNode — a premier provider of managed cloud Infrastructure-as-a-Service (IaaS) — to join the Telx Cloud Xchange ecosystem in Telx’s MIA1 facility in Miami. In addition to housing bpsNode infrastructure in Telx's high-density and resilient facility, Miami further serves as a strategic location based on its proximity to bpsNode’s Latin America-based clientele.
  • Telefonica launched its KeyCenter in Miami in 2013, built to withstand Category 5 hurricanes, and positioned to connect with the company's worldwide high-bandwidth network via those submarine cables. Telefonica trumpeted the speed, reliability and redundancy its Florida investment offered.
  • Allied Fiber continues to grow its dark-fiber superstructure between Miami and Jacksonville, cementing an Oct. 2014 deal with Summit Broadband that capitalizes on that same submarine cable network. "Local communities in Florida are demanding reliable, high-speed broadband infrastructure for businesses and consumers," said Hunter Newby, CEO of Allied Fiber.
  • In announcing in Nov. 2014 a $20-million investment in infrastructure and power capacity at two locations in Jacksonville, Cologix noted the interest among customers in "establishing connections with the two new subsea cable systems that are landing directly in Jacksonville from Central and South America."
  • EdgeConneX, specializing in hosting solutions at the edge of the network, announced in late March 2015 that it was going live with three new Florida-based Edge Data Centerslocated in Tallahassee, Jacksonville and Miami. "Today’s end-users want instant access to social media, video and gaming Internet sites via laptops, smartphones, tablets and other devices everywhere. The insatiable demand for this content is creating information bottlenecks and delays in metro areas previously overlooked by Internet infrastructure companies," said the firm's announcement.

“The Internet is served from one of nine peering points across the US today, which worked fine for email," said Clint Heiden, chief commercial officer at EdgeConneX. "Our Edge Data Center locations in Tallahassee, Jacksonville and Miami increase Internet performance significantly and provide a better Internet experience for end-users."

"Florida is the third-largest state for high-tech establishments, and nearly 250,000 Floridians are employed in the technology sector today," said new Enterprise Florida President & CEO Bill Johnson. “We look forward to the growth of EdgeConneX across the state."

And grow they might: EdgeConneX has talked of opening at least 10 new data centers in 2015.

Robust Ecosystem

So, data's on the move in Florida — by cloud, by sea and by land, deal after gap-filling deal. But above and beyond the servers and racks, sometimes the infrastructure supporting data's growth puts companies on the move too.

Since 2006, FPL has invested more than $2 billion on grid-strengthening improvements. Among the milestones, the company has strengthened more than 500 main power lines (feeders) serving key community facilities; and installed cutting-edge technologies — including 4.7 million smart meters and 11,500 other intelligent devices — to reduce power outages and provide customers with unprecedented information to better control their electric bills.

In October 2014, Chicago-based S&C Electric Co. announced a $3-million investment to expand its Florida operations beyond its current Orlando office and bring 170 new manufacturing and installation jobs to the state, pledging to establish a manufacturing facility in Palm Beach County to build its TripSaver II Cutout-Mounted Recloser technology that will be installed throughout FPL's smart grid network. The TripSaver equipment will help FPL detect and reduce power interruptions, and in certain cases, restore power, preventing extended outages. The first TripSaver IIs was deployed on FPL’s system in January 2015, with additional units being deployed steadily over the next five years.

“FPL has made a historic first step in the utility industry by taking action to reduce momentary interruptions for its customers,” said Mike Edmonds, vice president – U.S. Business, S&C Electric Co. “Based on government research, we estimate that the use of TripSaver II will provide as much as $500,000 annually in cost savings for electricity users on each main feeder as well as provide significant reductions in operating expenses that will benefit FPL and its customers.”

“This device, which I am pleased will now be built in Florida, will provide us with more information, enable split second grid self-healing measures, and speed restoration when needed," said Eric Silagy, president and CEO of FPL. "Every time we use advanced technology such as this, instead of sending a crew to investigate and repair an outage, it saves time and money while also improving the 99.98 percent reliability rate we currently deliver. It’s another way FPL keeps bills low and reliability high which benefits everyone, including our business customers who deserve every competitive advantage that we can provide them.”

This white paper was prepared under the auspices of Florida Power & Light Company. For more information, contact Crystal Stiles, economic development project manager for FPL, at 561-694-4112, or by email at Crystal.Stiles@FPL.com. On the Web, go to www.PoweringFlorida.com.

Clean, renewable energy continues to grow into the FPL power generation mix — a key check-off for global companies with sustainability mandates who are considering a Florida investment. By the end of 2016, FPL plans to install more than 1 million solar panels at three additional solar power plants. Pictured here is FPL’s DeSoto Next Generation Solar Energy Center, where 90,500 solar panels move into position to catch the sun’s rays.
Photo courtesy of FPL

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This white paper was prepared under the auspices of Florida Power & Light Company. For more information, contact Crystal Stiles, economic development project manager for FPL, at 561-694-4112, or by email at Crystal.Stiles@FPL.com. On the Web, go to www.PoweringFlorida.com.






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