For a place that gets sunshine nearly 300 days a year, you can now find a lot of clouds in Las Vegas. One of the economic bright spots in a city laid low by the recession and real estate bust is a spate of new data centers and cloud computing facilities in development and recently brought online to serve clients such as Google, eBay, DreamWorks, Sony and Cisco.

Photo by Levin Ellison/501 Studios
Burke Construction Group completed the Cobalt Data Center Project in Las Vegas.
Image courtesy Cushman & Wakefield
Electricity rates far below California and the national average are helping to encourage data center growth in Nevada.

Attracted by the area's reliable electrical grid, business-friendly environment and proximity to California, several companies have set up shop in Southern Nevada to meet the fast-growing demand for off-site computing and data storage.

Switch Up

Switch plans for an eventual 2.2 million sq ft of data center space, making it the most ambitious player in the market. The Las Vegas-based company expects to bring online this spring its SuperNAP-8 facility, adding an additional 350,000 sq ft of data storage space and bringing its current total to just over 800,000 sq ft.

Switch executives say that its physical expansion allows the company to further develop the “technology ecosystem” being cultivated at its fortress-like complex in southern Las Vegas.

“It's not about just being a data center," says Jason Mendenhall, Switch’s executive vice president of cloud. “We've introduced a new business cluster into the market that continues to diversify the economy by providing all the tools necessary for companies to put a footprint in this environment.”

Switch offers access to a superior fiber optic network purchased in 2002 out of the Enron bankruptcy. The failed Texas energy and commodity trading company had planned to use the Las Vegas communication hub to build a bandwidth exchange market.

Some clients keep operations staff on site to access Switch’s connectivity and cloud systems. "Those things offer our clients the opportunity to work on-site within the growing technology ecosystem which fosters collaboration and innovation,” Mendenhall says.

Data center development is seen in Nevada as a way to broaden its tourism- and mining-based economy. Gov. Brian Sandoval, in his 2011 state of the state address, called Switch “a treasure in our state that can launch this new focus on innovation.”

The Brookings Mountain West think tank, in an influential report on economic development and diversification in Nevada, recommended the state encourage the construction of data centers. “The state has strong but under-marketed IT industry anchors, a world-class Internet infrastructure, and locational advantages,” says the report authors.

Cobalt Data Centers CEO Mike Ballard, a longtime Las Vegas businessman, is a believer. His company recently opened its first facility and is seeking to grow. “Cobalt has identified two other areas in southern Nevada and it’s in our business plan to expand to those areas within six years of operation,” says Ballard, a former Switch executive.


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