Data Centers in Red Oak
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Red Oak – Dallas-Fort Worth Power & Connectivity
Executive Summary
Red Oak provides a strategic colocation option within the Dallas-Fort Worth metroplex, one of the most important connectivity hubs in North America. This market is ideal for enterprises requiring robust disaster recovery sites or scalable compute capacity with excellent power infrastructure. Choosing Red Oak delivers access to a top-tier market while mitigating some of the costs and congestion of Dallas proper.
Red Oak: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong regional connectivity with access to the dense Dallas fiber ecosystem. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramps are in Dallas, offering private and direct connections to all major clouds. |
| Power Cost | $0.07 – $0.09/kWh | Power mix is primarily natural gas (~50%) and renewables (~30%). |
| Disaster Risk | Moderate (43.46) – as of September 2025 | Main risks include severe weather events like hail, ice storms, and high winds. |
| Tax Incentives | Yes | State sales and use tax exemptions are available for qualified data center equipment. |
| Sales Tax | 6.25% (State) – as of September 2025 | Texas state sales tax; local taxes may also apply. |
Network & Connectivity Ecosystem
Red Oak benefits enormously from its position within the Dallas-Fort Worth region, a primary North American interconnection point. While the city itself is an emerging location, it leverages the mature and dense network of nearby Dallas.
Carrier Density & Carrier Neutrality: The market currently features 1 main provider across 2 facilities as of September 2025. True carrier neutrality is achieved by connecting to the rich ecosystem in Dallas, which features hundreds of unique network providers.
Direct Cloud On-Ramps: There are no direct cloud on-ramps located within Red Oak as of September 2025. However, dedicated and private network connections to all major cloud providers, including AWS, Google Cloud (GCP), and Microsoft Azure, are readily available through facilities in Dallas, just a short distance away.
Internet Exchange Points (IXPs): The primary regional IXPs, including the Equinix Dallas IX, are located in Dallas. Most peering is handled privately or through these major exchanges, ensuring efficient traffic routing across the southern United States.
Bare Metal: Bare metal server options are widely available from providers serving the Dallas-Fort Worth market. Companies like Hivelocity and phoenixNAP can provide dedicated servers with direct connectivity into the regional network fabric.
Power Analysis
Texas is known for its independent and robust power grid (ERCOT) and competitive electricity market, which directly benefits data center operators in locations like Red Oak.
Average Cost Of Power: Industrial power rates typically range from $0.07 to $0.09 per kWh as of September 2025. This competitive pricing structure makes it one of the more affordable major markets for high-density compute in the United States.
Power Grid Reliability: The grid supporting the Dallas-Fort Worth area is well-engineered for heavy industrial loads. Data centers in the region are typically supported by redundant power feeds from multiple substations, ensuring high levels of uptime.
Market Access, Business & Tax Climate
Red Oak's location provides a compelling mix of local access, regional reach, and favorable business incentives.
Proximity To Key Business Districts: The city is strategically positioned south of downtown Dallas, offering low-latency connectivity to the central business district as well as major corporate campuses throughout the DFW metroplex. This makes it an effective site for production and disaster recovery workloads.
Regional Market Reach: From Red Oak, organizations can effectively serve a population of over 8 million people in North Texas and provide low-latency services to major markets across Texas, Oklahoma, Louisiana, and Arkansas.
Tax Advantage For Data Centers: Texas provides significant tax incentives for data center operators and tenants. A state sales and use tax exemption on equipment necessary for data center operations lowers the total cost of ownership for new builds and hardware refreshes.
Natural Disaster Risk
Red Oak has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46 out of 100 as of September 2025. The primary threats are weather-related, consistent with the North Texas region.
Key risks include:
- Hail
- Ice Storms & Winter Weather
- Tornadoes & High Winds
- Drought & Heat Waves
- Lightning
- Riverine Flooding
