Say Yes To Aerospace in Virginia. Data Centers VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP

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1 Say Yes To Aerospace in Virginia Data Centers 1

2 Virginia s Data Center Industry: Virginia is home to approximately 650 data processing, hosting, and related establishments; employing 10,500 individuals during the past year Since 2003, over 7,500 industry jobs have been added paired with over $7 billion in investment Seventy percent of the world s internet traffic passes through the Metropolitan Area Exchange East, located in Ashburn, Virginia 1 Virginia leads the nation with the highest concentration of tech workers; one of every 10 private sector workers in Virginia works for a technology company 2 Centrally located on the East Coast, Virginia offers access to 40% of the U.S. population in a day s drive. Fifty-five percent of the U.S. population are within a 750-mile radius. 1 Loudoun Times: As data and communications head to Loudoun, a global tech hub emerges ( ) 2 Tech America Foundation: Cyberstates

3 Data Centers: An Overview As a critical network access point since the early days of the internet, Virginia plays a key role in supporting today s global internet traffic. Virginia hosts prominent commercial internet exchange points and has been one of the most active data center markets in the country with expansions by Equinix, Digital Realty Trust, and Corporate Office Properties Trust (COPT) amongst others. Companies such as Capital One Financial and Microsoft have discovered Virginia s critical IT infrastructure provides a foundation for the web-enabled services of tomorrow. Aware of the necessity for such provisions as redundant power supply and dual fiber paths, Virginia provides a wide variety of site and building options in both urban and rural settings. With the advance of cloud computing and online services, the demand for data centers is growing on a daily basis, and Virginia provides a timely and cost effective solution for locating these facilities. Virginia s Assets to the Industry: Northern Virginia is one of the strongest data center markets due to its historic status as a key intersection for communications networks and proximity to Washington, D.C. In Southern Virginia, Mid-Atlantic Broadband Cooperative, a not-for-profit cooperative, offers an advanced mile fiber-optic broadband network and provides access to multiple major fiber optic and telecom service providers. Included in its network are more than 60 business and technology parks UVA s Dependability Research Group focuses on research issues related to computing systems whose failure would have a severe negative impact. The research interests encompass safety-critical systems, critical infrastructure and emergent grid computer systems The Richmond area has been connected to Ashburn with dark fiber giving companies the ability to access data centers at a much faster and more affordable way. The fiber line opens opportunities for companies along I-95 between Richmond and Ashburn, including companies located within the Quantico Corporate Center. Virginia has low catastrophic risk, providing a safe and secure physical environment while still being in close proximity to the Nation s capital 3

4 Say Yes to Data Centers in Virginia Virginia s Low Catastrophic Risk: 4

5 Virginia s Strategic Partners: Aware of the necessity for such provisions as redundant power supply and dual fiber paths, Virginia provides a wide variety of site and building options in both urban and rural settings. With the advance of cloud computing and online services, the demand for data centers is growing on a daily basis, and Virginia provides a timely and cost-effective solution for locating these facilities. The experts at the Virginia Economic Development Partnership (VEDP) stand by to assist your team in identifying the best location to fit your needs. VEDP provides experienced project managers who will facilitate the coordination of state resources for your expansion or relocation project. State Partners Virginia Department of Business Assistance Virginia Department of Environmental Quality Virginia Department of Taxation Virginia Department of Transportation Virginia Economic Development Partnership Electric Providers in Virginia Dominion Virginia Power Old Dominion Electric Cooperative Family of Co-Ops American Electric Power (Appalachian Power) Allegheny Power Tennessee Valley Authority Old Dominion Power Company Several municipally owned and operated power companies 5

6 Fiber Providers in Virginia Allied Telecom Group AT&T BIT Broadband Broadview Networks BVU OptiNet CenturyLink Citizens Telephone Cooperative Comcast Cox Communications DCWIN FiberLight Gamewood Technology Group Level 3 Communications Lumos Networks MGW Communications Mid-Atlantic Broadband Cooperative ndanville RCN Scott County Telephone Cooperative Shentel TDS Telecom Verizon Windstream/PAETEC Zayo Kinex Telecom 6

7 Virginia s Cost Advantages Companies have improved their bottom lines just by locating in Virginia. From healthier, more productive workers, to cheaper, available and reliable electricity, our companies have benefited from the combination of cost-saving resources that only a Virginia location can offer. Virginia: Reliably Competitive Virginia offers companies a favorable business environment characterized by a stable, competitive tax structure and legislation that protects at will and right-to-work employment practices 3 rd lowest average workers compensation insurance costs in the nation Virginia s unemployment tax is 24 percent lower than the national average Right-to-work law allowing individuals the right to work regardless of membership in a labor union or organization Competitive average hourly wages Industrial Average Rates By Region

8 Virginia s State-of-the-Art Infrastructure: Virginia offers a wealth of excellent power, water, telecommunications and other business infrastructure resources necessary to succeed in today s global economy. Many large companies have located major facilities and backup operations in Virginia because of the state-of-the-art telecommunications infrastructure and dependable electric utilities Virginia is one of the most connected states in the country, ranking 8 th in TechNet s 2012 State Broadband Index. Over 1,000 miles of new fiber optic cable were constructed or planned in 2012 alone. In 2013, the average cost per unit of electricity for the commercial sector is 7.94 cents in Virginia, compared to cents for the nation Demand in Kw: Consumption in kwh: TYPICAL MONTHLY COMMERCIAL ELECTRIC BILLS, January 1, 2013 Source: Edison Electric Institute, Winter , , , , ,000 kwh AVG. Commercial Rates (cents per kwh) VIRGINIA $145 $976 $1,248 $13,893 $15, Alabama $228 $1,276 $1,608 $17,443 $19, Arizona $163 $1,180 $1,487 $13,418 $14, California $237 $1,473 $1,847 $18,873 $21, Connecticut $192 $1,618 $2,062 $22,668 $25, Delaware $282 $1,614 $2,053 $14,550 $16, District of Columbia $207 $1,334 $1,841 $19,302 $22, Florida $166 $1,081 $1,367 $14,116 $15, Georgia $242 $1,338 $1,517 $15,762 $17, Illinois $146 $957 $1,225 $11,511 $13, Indiana $175 $1,058 $1,388 $13,818 $15, Iowa $149 $791 $991 $9,809 $11, Kentucky $149 $951 $1,269 $12,906 $14, Maryland $148 $1,135 $1,530 $15,404 $17, Massachusetts $216 $1,587 $2,055 $22,258 $25, Michigan $205 $1,233 $1,615 $16,291 $18, Mississippi $165 $956 $1,221 $12,681 $14, New Jersey $217 $1,523 $1,973 $21,412 $24, New York $233 $1,464 $1,833 $19,059 $21, North Carolina $173 $862 $1,102 $11,718 $13, Ohio $156 $1,153 $1,438 $14,544 $16, Pennsylvania $162 $1,032 $1,367 $13,476 $15, Rhode Island $218 $1,579 $2,054 $20,430 $23, South Carolina $188 $958 $1,261 $13,415 $15, Tennessee $139 $976 $1,241 $12,844 $14, Texas $130 $676 $814 $9,300 $10, Washington $160 $988 $1,288 $13,018 $14, West Virginia $140 $945 $1,160 $12,824 $14, National Avg. $185 $1,172 $1,508 $15,531 $17,

9 Virginia Means Business: Streamlined business regulations, moderate corporate taxes, coordinated state-supported workforce training and export assistance combine to create an innovative economic strategy for the Commonwealth and one of the most prosperous business environments for our industrial community. As a testament to this, Virginia consistently receives top rankings from several industry-oriented publications and associations. Virginia continues as a leading state in the Forbes.com Best States for Business review. The review examines multiple objective measurements, including business cost, regulatory climate, quality of the workforce and economic growth. Virginia took the top spot in 2006, 2007, 2008 and 2009 and ranked second overall in 2010, 2011 and Virginia continues to rank as one of the top states in the CNBC Top States for Business review. In its seventh year, the review ranks states according to 10 broad categories, including the cost of doing business, the strength of the economy, the cost of living and business friendliness. Since the rankings began, Virginia has remained a top state, claiming the number one spot in 2007, 2009 and 2011, while receiving 2 nd in 2008 and 2010, 3 rd in 2012 and 5 th in Targeted Industry Incentives: Virginia understands the importance of data centers and continues to expand targeted incentives In 2009, Virginia created an exemption from the Retail Sales and Use Tax for computer equipment bought or leased between July 1, 2010 and June 30, 2020 for use in a data center. The facility must be located in Virginia, generate capital investment of at least $150 million and create at least 50 new jobs (reduced to 25 new jobs in areas of high unemployment) that pay one and one half times the prevailing average wage in the locality. In 2010, Virginia expanded the definition of qualified equipment to include servers, routers, generators, chillers, and other enabling hardware most often used by data centers In 2012, Virginia expanded the scope of the incentive program again. Language was added to the Code of Virginia that allows colocation data center facilities to aggregate the capital investment and new job requirements among the data center owner and tenants. The exemptions Virginia created in 2012 for owners and tenants, combined with the 5-percent sales tax exemption, are among the most competitive in the United States. 9

10 Major Data Centers in Virginia: Company Location(s) Bank of America Capital One Financial Corporation CoreSite Digital Realty Trust Equinix Microsoft Northrop Grumman Quality Technology Services (QTS) Sabey Data Centers Terremark Henrico Chesterfield Fairfax Loudoun Loudoun Mecklenburg Chesterfield Henrico Loudoun Culpeper Recent Data Center Announcements Since 2003, 61 companies have announced more than 7,500 data processing, hosting, and related jobs in Virginia accompanied with $7.3 billion in capital investment. Listed below are some of the top data center announcements made recently. 3 Company Corporate Office Properties Trust (COPT) DBT-Data Rackspace Hosting RagingWire Enterprise Solutions, Inc. Web Parts, LLC Wikipedia Location(s) Loudoun Harrisonburg Montgomery Loudoun Danville Loudoun 3 Note: Some companies that have announced recently were excluded due to already being listed in the Major Data Centers table. This was done to provide a more complete and diversified view of data centers in Virginia. 10

11 Education and Training With one in three residents awarded a bachelor s or advanced degree, the Commonwealth s workforce is one of the most educated in the nation. Some of the nation s best colleges and universities are located in Virginia, many offering undergraduate and graduate programs in all areas of business Select Degrees Conferred in IT and Related Programs at Virginia Universities and Colleges 4 Program Name Total Computer and Information Sciences 1,384 Computer and Information Systems Security 764 Information Technology 489 Computer Science 339 Systems Engineering 269 Information Science Studies 214 Management Information Systems 42 Computer & Software Engineering 36 Total IT and Related Degrees Conferred: 3,537 Virginia has a Skilled and Talented Workforce: From an affordable lifestyle and competitive business environment, to a skilled and ready labor force, Virginia is one of the most desirable places for business in America. Businesses in Virginia enjoy a business-friendly climate characterized by stable and competitive taxes, payroll costs, and lease rates, as well as legislation that protects at will employment practices. Note: table begins on following page 4 Source: State Council of Higher Education for Virginia, 11

12 Selected Occupations Virginia Employment Virginia Average Annual Wage Computer and Information Systems Managers 16,110 $143,380 Computer Network Support Specialists 8,810 $66,520 Computer Programmers 9,750 $76,500 Computer Systems Analysts 29,880 $96,670 Computer User Support Specialists 18,250 $52,440 Database Administrators 6,090 $91,460 First-Line Supervisors of Office and Administrative Support Workers 39,560 $54,600 Human Resources Assistants, Except Payroll and Timekeeping 4,260 $38,430 Office Clerks, General 86,810 $29,530 Receptionists and Information Clerks 29,700 $27,580 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 36,530 $34,940 12