How did Ashburn, Virginia become the center of the digital universe
I went down a rabbit hole to figure out why 70% of all internet traffic flows through Northern Virginia
The center of the digital world is not in Palo Alto, or even on the West Coast. The “cloud” it turns out is not in the cloud. The cloud (or a vast majority of it) lies in suburban towns in Northern Virgina close to Dulles Airport. Ashburn, VA to be more specific, also known as the Data Center Capital of the World along with others like Reston. “Today, up to 70 percent of the world’s internet traffic flows through” centers in Northern Virgina daily.
Zooming into the massive spike in Goldman’s graph one starts to see building after building, each overlaid with a tech, telco or hyperscaler company name alongside it. 112 of the NoVa data centers are Amazon’s. A distant second is Digital Realty, the $69bn market cap data center REIT with 34 (NB: Since it’s IPO in 2004 Digital Realty stock is up 1,458.08%. 35% in the last 12 months alone)
According to Apollo, data centers consume 26% of all power in Virgina.
So how did this happen? Why Virginia? A deep internet rabbit hole later, I would summarise it as a combination of and accident of geeks, government funding and incentives and reinforcement effects.
Early through the rabbit hole I texted fellow geek and big brain (his not mine) azeem
Bolt, Beranek and Newman refers to BBN, the MIT proffesors who were contracted by ARPA in the 1960s to launch ARPANET, the internet’s predecessor. They did indeed launch the first exchanges between networks, but those linked Harvard, MIT to research labs in the West Coast at Stanford and UCLA. “LO” everyone 😉
So, had this flowed foward in the logical way, one could assume the epicenter of the physical digital world would lie in Boston or Palo Alto or Los Angeles. But just like Silicon Valley started in Philly before a mother drew her son home to orange orchards, a different “mother” led to the move to Virgina.
Which is Azeem’s allusion to ANS, Advanced Network and Services, the company set up in 1990 to support the transition of ARPANET into a commercial entity. That transition led to the establishment of one of the first commercial internet exchange points (MAE-East) in Tysons Corner, VA (where I worked in the dot-com days!).
In 1994 a fledgling startup called America Online (‘you’ve got mail!) acquired ANS for $35m. Tellingly AOL was headquartered in Northern Virgina… and this for me was the aha! moment. The combination of ANS being government funded and thus close to DC, the first physical exchange being in NoVA, and a then client that wanted to be close to that exchange whose young founder (Steve Case) happened to base his company in Loudon County, VA might have been the trigger. AOL soon moved that first exchange to… Ashburn, VA.
As the internet expanded, as this blog points out, Virginia just happened to be perfectly place in the middle of the East Coast to expand North and South. The fact that some well-funded clients crunching a lot of data and needing to share it with peer agencies around the Langley, VA and Fort Meade, MD area likely also helped.
Today, NoVA has one of the most robust fiber optic networks in the world including a number of undersea trans-atlantic cables ending up in the state. Reinforcement effect of where the data needed to flow and consumed.
And slowly but surely local government woke up and in 2010 Loudon County created a tax incentive to bring in even more equipment and physical footprint into the county. The county offered a tax abatement program which given all of the above just made it the logical choice of location even stronger. The recent spike in “missed taxes” from this blog post only exemplifies the acceleration of Loudon data center build outs.
Ashburn sits atop the world’s densest intersection of fiber networks, making it an ideal location to store and distribute data. It is unique in its connectivity, and its data centers are laying the physical foundation of the digital economy.
Rich Miller,
Founder & Editor at Large, Data Center Frontier
Today 26% of all energy consumption in Virgina is consumed by data centers, the highest by a factor of any US state. The energy is provided by Dominion Energy (also infamous for the cyberhack a few years ago).
Recently Dominion stated “We are experiencing the largest growth in power demand since the years following World War II,” observed Ed Baine, President of Dominion Energy Virginia. “No single energy source, grid solution or energy efficiency program will reliably serve the growing needs of our customers.”
And satisfying that demand is going to take time… a long time:
And Virgina as the center of the data universe is only expected to grow. An analysis by the Virginia state government forecasted that unconstrained demand for energy (mostly from data center demand) would double over the next 10 years and almost triple by 2040.
Fascinating rabbit hole making me realise the incredible role that the “Dulles Corridor” has played and will continue to play in the expansion of the internet, AI, and given the insane energy demand, innovation and deployment of efficient and sustainable energy sources.
