For Whom Are the Data Centers?

Amazon announced their plans to build two large-scale data centers in Caddo and Bossier Parish last month. The data centers will represent one of the largest investments in north Louisiana’s history, $12 billion. With the projects beginning soon, understanding the demand for data centers can help provide perspective for this investment. 

The services data centers provide are not particularly glamorous, but they are undeniably vital.  IBM offers a basic definition of data centers: “a physical room, building or facility that houses IT infrastructure for building, running and delivering applications and services. It also stores and manages the data associated with those applications and services.” Storing and processing information in an age where new digital information is being created and shared at an incredibly rapid rate is how people are able to continue using all of the devices and technologies they have come to rely on. 

Approximately 70% of hospitals use cloud computing services to ensure that their data is handled in a secure and effective way, with off-site data centers making this possible. Louisiana alone is home to well over 100 hospitals, whose patients, doctors, nurses, and everyone in between rely on a durable digital infrastructure to deliver their services. While the combination of on-site or off-site data centers varies between medical facilities, there is no question that, in a medical landscape driven by data, data centers are utterly vital to the lives and livelihoods of all involved. 

Banks are among the vital facilities who have turned to data centers for their storage. Financial Review reported in January of this year that banks have moved most if not all of their transactions and data to the cloud, believing data centers to be faster, more reliable, and more cost effective. Amazon Web Services, the same company responsible for the two newly announced projects in Louisiana, is estimated to be responsible for 15% of global banking loads, per Financial Review. Data centers enable the speed and security of basic modern financial transactions. 

Beyond hospitals, banks, e-commerce businesses, artificial intelligence (AI) platforms, and other large scale operations, personal digital activity also relies on data centers. Using apps, uploading videos, scrolling through social media, and many more of the tasks that characterize internet use all take advantage of data centers. Due to misconceptions about their use and political opposition, data centers are too often characterized as a service solely related to AI. The reality is far more expansive and nearly every operation in the digital age is touched by data center services. 

The economic impact of data centers is positive and complex. In the immediate months during construction, construction jobs and the subsequent local business that accompanies them will multiply. Louisiana Economic Development (LED) announced that the upcoming Amazon projects will support up to 1,500 construction jobs. The Wall Street Journal reported on the data center “gold rush” for construction workers, with a new demand for work bringing higher wages and “a sense of security that, for them [construction workers], is often elusive.”

After the initial construction period, more jobs follow as related industries grow. The James Madison Institute’s report on data centers consolidated research around the economic benefits of data centers to their locations and concluded that, “each additional job in the US data center industry supports 6.4 additional jobs elsewhere in the economy through increased consumer spending and growth of supporting industries. Moreover, these positions garner salaries well above regional averages.” There is a ripple effect that extends far beyond the early days of building. 

Data centers are for the hospitals, banks, and people who use them. These facilities create jobs and bring economic momentum to communities. More than just the infrastructure of the digital age, data centers are a promise of increased jobs, business, and investment opportunities that would be foolish to turn down. 

Links to Learn More: 

• No Turning Back the Digital Clock: Why Data Centers Matter Far More Than You Think | Forbes
• Louisiana’s Energy Moment: Why Competition—Not Regulatory Shortcuts—Will Power Growth and Lower Costs | Pelican Institute for Public Policy
• Data Center of Attention: The Power Houses of the Digital World | Pelican Institute for Public Policy