Bandwidth IG: The Future of Data in Silicon Valley

Silicon Valley Future

A Historic Look at Silicon Valley

In the 90’s, there was the internet.  Or rather, the dawn of the internet, which came with it the need for data facilities to house increasingly complex websites, applications and services.  Laying to the south of San Francisco, Silicon Valley and more specifically the Santa Clara valley, was home to some of the world’s original technology innovators.  The explosion of development that took place in this region eventually led to an increasing number of multi-tenant carrier hotels and internet exchanges.

Data Center Frontier detailed the evolution of the Silicon Valley data center market, in a recently published special report.  They noted when this era of innovation gave way to the dot-com boom, a new industry emerged of colocation providers and hosting companies, who began building their own data center facilities around Silicon Valley.

“Data center requirements in Silicon Valley typically originate from companies already located in the region, often representing the primary West Coast footprint for larger web infrastructures. In many cases, companies see data center space in Silicon Valley as a strategic imperative that outweighs other factors,” Data Center Frontier, Special Report, Silicon Valley Data Center Market.

Growth and Capacity in California’s Northern Corridor

Silicon Valley is the second largest data center region in the United States, rivaling “Data Center Alley” in Ashburn, Virginia, as the world’s most concentrated data center area. The region has some notable differences from other top data center hubs, with a unique set of value propositions.  In spite of high costs of both real estate and power, risk of earthquakes and other environmental factors such as wildfires and water shortages, Silicon Valley, and more specifically Santa Clara, continues to attract an ever-increasing interest from cloud providers and data center users/ operators. This is due to an attractive proximity to key industry players and technology enterprises, the continued cloud boom, and recently an explosion of high-density computing requirements as a result of the adoption of artificial intelligence and machine learning.

Silicon Valley has entered a new phase of advancement, with accelerated growth projected over the upcoming years.  Santa Clara is home to nearly 40 data centers across 18 square miles, with new colocation providers and increased construction already underway in the market.  According to research from datacenterHawk, as of 2019, the Silicon Valley Data Center Market was home to 2.9 million square feet (SF) of commissioned data center space, representing 411 megawatts (MW) of commissioned power.  At last report, there was only 42 MW of power still available, in a market that has absorbed approximately 40 MW annually.  There is 498 MW of new capacity planned, and this development will continue over the next 2 – 3 years in an effort for suppliers to meet market demands which continue to be driven up largely by the recent explosion of cloud compute deployments.  In the absence of available capacity, a robust leasing and subleasing market has emerged, which will continue while development catches up with demand.

Potholes on the Digital Highway

In a perplexing paradox, the telecommunications networks in and around the Bay Area have not seen material investment or upgrades in the last 20 years.  California, home to some of the world’s greatest technological innovators, relies on fiber networks that are much closer to the end of their useful life than the beginning.  Meanwhile, the world demands more of those connections than ever before – and that demand shows no sign of abating.

Many companies now consider data to be their most valuable asset.  When that data travels across older or low-quality fiber cables, the risk of it getting distorted becomes higher.  Network engineers will attempt to overcome this quality-deficit by investing in more forgiving and consequently more expensive hardware.  Yet as bandwidth demand grows this can become a vicious cycle.

In order to support the promise of this data-driven future, infrastructure investment is required.  This includes rethinking fiber networks from the ground up.

“Twenty years ago, fiber networks were built to connect Central Offices (legacy hubs from the former Bell System) and multi-tenant office buildings.  Over time, and successive rounds of elective surgery, the carriers operating these networks are finding they lack the integrity required by today’s data-intensive enterprise,” said Jim Nolte, CEO of Bandwidth Infrastructure Group.

What does this mean for the Industry?

All of the digital use cases being dreamed about today rely on data capture, storage and analysis which will have to take place in some kind of a data center.  Or just as likely, spread across multiple data centers.  Maintaining the integrity of those digital transactions will require a resilient, state-of-the-art fiber network to ensure data arrives promptly and uncorrupted.

“We knew all along that being able to meet and exceed the network specifications of today’s data-intensive businesses would require a brand new, purpose-built fiber network,” Nolte added. “We are investing in support of productivity and a bright digital future made possible by modern infrastructure like that which is provided by Bandwidth IG.”

Learn more about how Bandwidth IG is working to upgrade and expand available network infrastructure in Northern California.

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