The Interstate 35 corridor connecting Austin and San Antonio has become one of the more compelling data center markets in the United States, for reasons that are easy to quantify. The two cities sit approximately 80 miles apart, providing geographic separation useful for disaster recovery planning while sharing the same regional power infrastructure, connectivity backbone, and technology talent pool. For Austin-based companies evaluating where to put their second data footprint, and for San Antonio companies building their primary infrastructure, this corridor offers market characteristics that hyperscale markets in Northern Virginia, Dallas, and Phoenix increasingly struggle to match.
Why This Corridor Is Getting Attention
San Antonio and Austin are not newcomers to the data center conversation. But the way the two cities function as a paired market, rather than competing markets, is a relatively recent framing.
Austin drives significant demand. As the city has grown into one of the country’s major technology hubs, attracting semiconductor manufacturers, software companies, and enterprise technology firms, the infrastructure requirements of those organizations have grown alongside them.
San Antonio absorbs a meaningful portion of that demand with better economics. Power costs in San Antonio average approximately $0.12 per kilowatt-hour, roughly 36% below the national average of $0.19 per kWh and typically lower than Austin rates. Real estate costs follow a similar pattern. For a colocation facility running high-density compute, those differences compound over the length of a multi-year cabinet commitment.
The San Antonio colocation market reported only 1.3% vacancy in 2023 according to CBRE, making it the second-tightest market in the country at that time. That vacancy rate reflects consistent demand that has outpaced supply additions, not a surplus of available space.
The Disaster Recovery Case
For any organization running production infrastructure, geographic redundancy is not optional. When primary systems fail, whether from hardware failure, software error, or a physical event affecting a facility, the secondary location needs to be far enough away to avoid the same event while being close enough for practical management.
The Austin-San Antonio distance (75 to 90 minutes by road) hits a functional sweet spot for disaster recovery:
Far enough for geographic separation. The two cities are unlikely to be affected by the same localized event, power grid disturbance, or weather incident simultaneously.
Close enough to manage. Staff who need to physically access a secondary facility can reach it in the same day. The network path is short enough to support practical replication strategies.
Same regulatory environment. Both cities are in Texas, so there are no cross-state compliance complications, different utility regulatory structures, or employment law variations to navigate.
For Austin-based technology companies establishing a Texas-based secondary site, San Antonio is often the most practical answer.
The Long-Haul Fiber Advantage
San Antonio sits along established long-haul fiber routes that connect Texas to national and international networks. The city’s position in South Texas, along routes running between Mexico, the Gulf Coast, and the eastern US, gives it network connectivity characteristics that benefit colocation customers.
For organizations with international data flows, government or defense customers that require low-latency connections to DC or the Gulf region, or financial services firms that need direct access to fiber routes, the network geography of San Antonio matters beyond just the local ISP options.
H5 Data Centers, the carrier hotel operating at 100 Taylor Street in downtown San Antonio, notes that the city functions as “the top point of interconnection in the San Antonio and Austin metropolitan areas” with access to more than 35 communications carriers. That density of carrier options gives colocation customers flexibility in network provider selection and leverage in pricing negotiations.
Boutique Colo vs. Hyperscale in San Antonio
The San Antonio market has both ends of the colocation spectrum.
On the hyperscale side, CyrusOne operates multiple large campus facilities, and Vantage Data Centers has new development underway. These facilities serve the largest compute requirements with enterprise-grade infrastructure and significant power capacity.
On the boutique side, Bexar Datacenter at San Antonio Technology Center offers something the hyperscale facilities structurally cannot: physical integration with office space.
For companies that want their servers in the same building as their San Antonio team, the proximity advantage is straightforward. Near-zero latency to owned hardware, physical access without travel, and a single facility relationship covering both office and infrastructure needs.
The SATC Colocation Services facility is particularly suited to organizations in the technology, defense, biomedical, and research sectors that have specific infrastructure requirements alongside their office space needs. The fiber-to-suite connectivity and TxDir network access available throughout the building extend into the data center environment.
What Austin Companies Looking at San Antonio Should Evaluate
The due diligence process for establishing San Antonio data center presence, whether as a primary facility or a secondary DR site, typically covers:
Power and cooling. Confirm power density per cabinet matches your hardware requirements. Verify the facility’s redundancy ratings and generator backup capacity.
Connectivity options. A carrier-neutral facility lets you select and combine providers. Confirm which carriers serve the facility and what cross-connect options are available.
Physical access. For organizations that need to manage hardware regularly, evaluate how far the facility is from your San Antonio office or how it would affect operational workflows.
Network latency. Measure latency between your Austin primary site and the San Antonio facility. For most production workloads and replication strategies, anything under 5 milliseconds is operationally effective.
Operational support. Confirm what remote hands services are available if your team cannot be on-site.
Austin-San Antonio Corridor FAQs
Why are companies choosing San Antonio over Austin for data center colocation? San Antonio offers lower power costs (averaging $0.12/kWh vs. higher Austin rates), lower real estate costs, and similar connectivity advantages. For Austin-based companies, San Antonio also provides geographic separation useful for disaster recovery, while remaining within the same state regulatory environment and close to the same talent pool.
How far apart are Austin and San Antonio? Austin and San Antonio are approximately 80 miles apart along Interstate 35, roughly a 75-90 minute drive depending on traffic. This distance is sufficient to provide geographic separation for disaster recovery purposes while keeping both cities in the same regional market.
What makes the Austin-San Antonio corridor suitable for data center infrastructure? The corridor sits along established long-haul fiber routes connecting Texas markets to national networks. Both cities have favorable power infrastructure, low natural disaster risk relative to coastal or tornado-prone markets, and growing technology talent bases. San Antonio’s power costs are approximately 36% below the national average.
What colocation options are available in San Antonio? San Antonio has both hyperscale data center facilities (CyrusOne, Vantage Data Centers) and boutique colocation options. Bexar Datacenter offers on-site colocation inside San Antonio Technology Center, which is particularly relevant for companies that want their servers in the same building as their San Antonio office.
Is San Antonio a tight colocation market? Yes. The San Antonio colocation market reported only 1.3% vacancy in 2023 according to CBRE, making it the second-tightest market in the country at the time. Demand has consistently run ahead of supply, which reflects both the quality of the infrastructure and the growing technology presence in the region.
Ready to talk about San Antonio colocation options or office space in the Medical Center? Reach the SATC team at 210-582-5800 or contact us here.