Data Centers in Waco
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Waco, Texas – Central Texas Hub for Resilient Infrastructure
Waco serves as a strategic colocation market for businesses requiring a resilient, cost-effective Texas presence without the density of Dallas or Austin. Its location offers a low-risk operational environment, making it a strong choice for disaster recovery, secondary compute sites, and serving the Central Texas corridor. This market delivers reliable infrastructure and favorable tax conditions, ensuring uptime and reducing operational overhead.
Waco, Texas: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, though not a primary international hub. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramps are in Dallas or Austin; private network extensions are available. |
| Power Cost | $0.06–$0.08/kWh (est.) | Based on Texas's diverse energy mix and competitive industrial rates. |
| Disaster Risk | Moderate (43.46) | Low overall risk profile; primary hazards are weather-related. |
| Tax Incentives | Yes | Includes a state sales and use tax exemption for qualified data center projects. |
| Sales Tax | 6.25% (Texas) – as of Midyear 2025 | Lower than many other national tech hubs, offering operational cost savings. |
Network & Connectivity Ecosystem
Waco provides a reliable connectivity environment suitable for enterprises and service providers targeting Central Texas. While not a primary interconnection hub like Dallas, its ecosystem is more than sufficient for most production and disaster recovery workloads.
Carrier Density & Carrier Neutrality: Waco has a healthy mix of local and regional carriers, with over 6 network providers available as of September 2025. The market supports carrier-neutral facilities, providing choice and competitive pricing for transit and transport.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Waco as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure via the primary hubs in Dallas or Austin, typically using private network extensions like wavelength or Ethernet services.
Internet Exchange Points (IXPs): Public peering is not a feature of the Waco market. Most network peering is conducted privately between carriers or routed through major exchange points in Dallas to achieve low-latency connections to national and global networks.
Bare Metal: Bare metal server options are available in the broader Texas market, often provisioned from nearby data center hubs. Providers like Hivelocity and Latitude.sh can serve customers in Waco with dedicated infrastructure solutions.
Power Analysis
Waco benefits from the competitive and resilient Texas power grid, which helps control operational costs for high-density deployments.
Average Cost Of Power: Industrial power costs are estimated to range from $0.06 to $0.08 per kWh as of September 2025. This competitive pricing is driven by a grid powered predominantly by natural gas (~50%) and a significant share of renewables (~30%), which helps stabilize long-term energy expenses.
Power Grid Reliability: The Texas grid provides well-engineered and reliable power to the Waco area. Local data centers are typically supported by redundant power feeds from separate substations to ensure high levels of uptime for critical operations.
Market Access, Business & Tax Climate
Waco's strategic location and favorable business climate make it an attractive alternative to the state's larger metropolitan areas.
Proximity To Key Business Districts: Data centers in Waco are positioned to serve local government, education, and healthcare institutions. The city's central location along the I-35 corridor provides excellent access to both the Dallas-Fort Worth and Austin-San Antonio metroplexes.
Regional Market Reach: From Waco, organizations can effectively serve a population of over 20 million people across Central Texas with low latency. It is an ideal location for disaster recovery sites for businesses operating in Dallas, Austin, or Houston.
Tax Advantage For Data Centers: Texas provides significant tax benefits for data center operators and tenants. The state's sales and use tax exemption on equipment, software, and power significantly lowers the total cost of ownership for qualified projects.
Natural Disaster Risk
Waco has a moderate natural disaster risk profile, making it a secure location for critical IT infrastructure. As of September 2025, the FEMA National Risk Index for the area is 43.46 out of 100, which is considered very low relative to the national average.
The primary risks are atmospheric and weather-related, including drought, hail, lightning, riverine flooding, and strong winds. The region has a low risk of major seismic or coastal events, reinforcing its suitability as a stable and resilient data center location.
