Jim Zografos, VP of Americas Portfolio East Management in North America, Digital Realty
January 7, 2025

For those familiar with infrastructure development and the data center industry, Ashburn, Virginia, holds great significance.

Known as Data Center Alley, Ashburn, Virginia, is considered a central internet hub. With its expansive square footage of data center infrastructure, 133 data centers call Ashburn home.

But this isn’t a recent development. Northern Virginia has long supported internet-related technological innovation, from early TCP/IP packet networks to internet exchanges and today’s subsea, high-speed connectivity cables. These technologies, paired with attractive government incentives and ideal environmental conditions, make data center and technology companies eager to establish a footprint in Ashburn.

Let’s dive further into Data Center Alley’s past. Plus, we’ll explore how Ashburn is ideal for data center providers and what the future holds for the internet hub.

The history of Data Center Alley

So how did Loudoun County, Virginia, become a data center hot spot?

Turns out, there’s a long history of technological innovation in Virginia. In the late 1960s, the Arlington-based Advanced Research Projects Agency Network created a packet-based information transfer network between the Pentagon and major universities. These TCP/IP networks provided connectivity across the U.S. and a foundation for the future data center networks to come.

Fast forward to 1992, when the Metropolitan Area Exchange-East established internet exchange points in Ashburn, Reston, and Vienna, Virginia. These internet exchange points increased overall network speed and connectivity — which is essential for high-speed, high-volume data transfer. With these capabilities, global companies started to invest in data center infrastructure through the 1990s and 2000s, including AOL, Yahoo, UUNET/WorldCom, and PSI Net.

The dot-com bubble accelerated growth in Data Center Alley as companies could build high-capacity, fiber-connected data centers without the easement and regulations of more urban areas. Its geographical location also has low occurrences of natural disasters to protect mission-critical workloads and limit downtime.

Today, Data Center Alley is home to approximately 35 million square feet of data centers that support more than 3,500 technology companies. Digital Realty has 15 move-in ready data centers in Northern Virginia, occupying 5,250,100 square feet of that 35 million square feet.

The allure of the Loudoun County Data Center Alley

Ashburn’s high-density data center can be attributed to Loudoun County’s attractive location, workforce, network connectivity, power, space, and tax benefits for companies.

Location: Data Center Alley provides companies with an environmentally safe place and technologically advantageous infrastructure on which to build. Its close proximity to several established internet exchange points means colocation providers are physically closer to larger cloud and data source providers. This reduces latency and downtime while making it easier to process large volumes of data and solving the challenges of ever-increasing Data Gravity by processing data as close as possible to network hubs.

Workforce: Data Center Alley’s proximity to Washington D.C., provides data centers with access to skilled technicians from the surrounding metro areas who have experience with data center and mission-critical infrastructure — and connections to adjacent trades, such as HVAC, thermal management, and electric.

For more local contractors, data center providers like Digital Realty have invested in education through local community colleges, the Northern Virginia Technology Council, and professional organizations to provide training curriculums and increase overall data center workforce development.

Network connectivity: Loudoun County provides access to many redundant fiber-optic loops, connecting each data center countrywide. This provides ample cross-connection opportunities for data center providers between infrastructure sites. Subsea cables also provide connectivity for global data exchange.

Power: Power is less expensive in Data Center Alley. Dominion Energy, the local power provider, charges data center companies rates 28% lower than the national average. This makes it much more affordable for data centers to power and scale infrastructure. Its location near the Potomac River also provides a steady flow of water for cooling systems via municipal water networks.

Space and resources: Few developed areas have large swaths of cheap, flat, and available land that can run massive amounts of fiber and house data centers. Despite the continuous data center growth in Loudoun County over the past 15 years, there’s still land available for development and local government initiatives to build broadband and fiber connectivity. This makes it easier to build data center infrastructure.

Tax incentives: The Commonwealth of Virginia has added tax incentives and legislation for data center providers to help promote growth and investment. For example, the sales and use tax abatement program saves data center operators and customers 6% on servers, chillers, generators, and server-related hardware. Beyond hardware-specific purchases, there are local and statewide incentives for additional data center development and job training offerings.

Innovation within the Dulles Technology Corridor

Data Center Alley’s influence doesn’t end in Loudoun County. It's only one part of Northern Virginia’s data center market. There’s also the Dulles Technology Corridor, which runs from Ashburn down to Arlington, Virginia.

Called “The Silicon Valley of the East,” the Dulles Technology Corridor is home to numerous technology companies, including data centers, telecommunications firms, satellite companies, and government initiatives. This high concentration of technology companies makes the Dulles Technology Corridor ripe for investment and innovation. Organizations will find strong ties to steady government contracts, cybersecurity research, networking technology, data center workforce training, and green energy programs.

To support the requisite high-density servers, hyperscale cloud providers, Hybrid IT deployments, and connections with subsea cables for high-speed connections abroad these technology companies need, the Dulles Technology Corridor’s data centers are expanding. Such innovations, paired with educational incentives and technology centers, will not only help data center providers navigate the influx of artificial intelligence (AI) and machine learning data requirements but also help them scale.

Still, as the industry grows, energy infrastructure will trend toward data centers with dedicated server-specific power on connected campuses with independent power stations such as natural gas. Even small modular nuclear reactors could be a reality in the next 10-20 years as innovative, forward-thinking data centers deploy alternative power sources to achieve long-term sustainability goals and a competitive advantage.

Tapping into the data center of now and the future

As we’ve seen, Data Center Alley is an essential internet hub due to its rich history in internet-related technological innovation, location on the Dulles Technology Corridor, workforce, and more. But perhaps equally important, Virginia’s data centers and power grid have proved to be as reliable as the business incentives that make technology investments so attractive — especially in Ashburn.

At Digital Realty, we’ve long recognized Northern Virginia/Ashburn as a data center hub for innovation and workforce development. That’s why we’ve invested our time and resources in the area to offer organizations the best-in-class infrastructure and connectivity needed for data and AI readiness.

As the world’s largest data center platform with over 300 facilities worldwide (15 of which are in Northern Virginia), we’re well positioned and able to support the high-density colocation and interconnectivity needs of global organizations looking to solve Data Gravity and scale in Ashburn, Virginia, without sacrificing business goals.

With access to Digital Realty’s PlatformDIGITAL®, companies in Northern Virginia/Ashburn can:

Optimize their performance to gain a competitive advantage.
Shorten the connection time – even for high-density AI workloads.
Remain compliant.
Reduce their environmental footprint.

Learn more about Digital Realty’s Northern Virginia data centers.

FAQs

Why is Virginia a data center hub?

Virginia has become a data center hub due to several factors, such as its strategic location on the east coast of the United States, favorable tax incentives for data centers, and a skilled workforce. Additionally, the state offers a business-friendly environment for technology companies to thrive.

Why is Ashburn, VA, a central internet hub?

Ashburn, Virginia, has become a central internet hub due to the high concentration of data centers and network infrastructure in the area. It serves as an essential hub for internet traffic and connectivity, facilitating communication and data exchange on a global scale.

Where are the data centers built in Virginia?

Data center expansion continues throughout the state of Virginia, particularly in the area of Ashburn.

Where is the Dulles Technology Corridor?

The Dulles Technology Corridor is a stretch of land along the Dulles Toll Road in Northern Virginia that’s home to numerous technology companies, including data centers, telecommunications firms, and government contractors.

Is Ashburn a data center capital?

Because Ashburn, Virginia, is a major hub for data centers and network infrastructure, it's often referred to as a data center capital.

How many data centers are in Ashburn’s Data Center Alley?

There are hundreds of data centers located in Data Center Alley. Digital Realty boasts 15 secure and scalable data centers in Ashburn, meeting the increasing demand for data storage and processing capabilities.

What is a data center hub?

A data center hub is a geographic area where there’s a high concentration of data centers and network infrastructure. These hubs typically attract technology companies and data center operators due to favorable business conditions and access to critical resources.

Where are the internet hubs of the world?

The internet hubs of the world refer to specific locations that serve as major points of interconnection for global internet traffic. Ashburn, Virginia, is one of the key internet hubs, along with other major cities, like New York, London, and Tokyo.

Data Center Alley: How Ashburn became a data center hub of the world