Data Centers in Waco
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Waco – Strategic Central Texas Colocation
Waco offers a compelling alternative to the primary Texas data center markets of Dallas and Austin. It provides a strategic location for disaster recovery and secondary deployments that require a Central Texas presence without the higher costs of major metropolitan hubs. This market is ideal for businesses focused on operational resilience and cost-effective scalability.
Waco: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, suitable for many standard enterprise and DR workloads. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is available via private network extensions to Dallas or Austin. |
| Power Cost | ~$0.07-0.09/kWh | Sourced from Texas's diverse grid, including significant natural gas and wind generation. |
| Disaster Risk | Moderate (Score: 43.46) | Primary risks are weather-related, common for the region; avoids coastal threats. |
| Tax Incentives | Yes | State-level sales and use tax exemptions are available for qualified data centers. |
| Sales Tax | 6.25% (State Rate) | This is the Texas state sales tax as of mid-2025. |
Network & Connectivity Ecosystem
Waco is a secondary market with a focus on regional connectivity, making it a sound choice for specific workloads rather than a primary interconnection hub.
- Carrier Density & Carrier Neutrality: Waco has a provider count of over 6, as of September 2025. The market supports carrier-neutral facilities, offering access to regional and national network providers.
- Direct Cloud On-Ramps: There are no direct cloud on-ramps within Waco as of September 2025, enabling access to 0 cloud regions locally. Businesses connect to all major cloud providers, including AWS, Google Cloud (GCP), and Microsoft Azure, via private network links to data centers in Dallas or Austin.
- Internet Exchange Points (IXPs): Public peering is not a feature of the Waco market. Peering is typically handled privately or through network providers connecting to major IXPs in Dallas.
- Bare Metal: Bare metal server options are available, primarily through providers that can deploy custom infrastructure into the region. Services from providers like Hivelocity or Latitude.sh can serve Waco via their Texas data centers.
Power Analysis
Waco benefits from the competitive and robust Texas energy market, which is managed by ERCOT.
- Average Cost Of Power: Industrial power costs in the Waco area are generally in the $0.07 to $0.09 per kWh range, as of September 2025. This competitive pricing can significantly reduce operational expenditures for power-dense deployments.
- Power Grid Reliability: The power grid is part of the Texas Interconnection. Local data center facilities feature well-engineered power delivery with multi-substation support and standard N+1 or 2N redundancy for critical systems.
Market Access, Business & Tax Climate
Waco provides strategic access to Central Texas with significant financial advantages.
- Proximity To Key Business Districts: The city is strategically positioned along the I-35 corridor, placing it between the Dallas-Fort Worth Metroplex and Austin. This location is ideal for logistics, distribution, and serving businesses throughout Central Texas.
- Regional Market Reach: From Waco, digital services can effectively reach a population of millions across the major Texas cities with low latency. It serves as an excellent disaster recovery site for operations based in Dallas, Austin, or Houston.
- Tax Advantage For Data Centers: Texas offers a significant state sales and use tax exemption on equipment, software, and power purchased for qualified data centers. This incentive directly lowers the capital and operational costs of establishing a new facility or expanding an existing one.
Natural Disaster Risk
Waco has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46 out of 100, as of September 2025. Its inland location shields it from direct hurricane and coastal flooding threats.
Key risks for the area include:
- Severe Storms: Hail, strong winds (Winter Weather), and lightning are common regional threats.
- Heat Wave & Drought: Extended periods of extreme heat and low precipitation can strain resources.
- Flooding: Riverine flooding is a consideration in specific low-lying areas.
- Wildfire: Risk is present, particularly during dry conditions.
