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Chicago's new role: hub of the digital heartland

Chicago's new role: hub of the digital heartland

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Thanks to its centralized location in the North American continent, Chicago is seen as the ideal location for data centers.

In the thick of the industrial revolution, the city of Chicago rose as the heart and hub of production, trading and transportation, thanks to its centralized location on the North American continent. The railroads all converged there, shipping goods from East Coast ports and factories to points west.

When the St. Lawrence Seaway opened -- connecting Great Lakes shipping with trans-Atlantic shipping -- Chicago also became the gateway for shipping to the middle of the continent. And, again because of it's centrality, Chicago's O'Hare International Airport grew to become the one of the world's busiest airports. And with the interstate highway system, the city is also a trucking hub.

Now, it is reported, Chicago's place in the middle of the continent is turning the city into the hub of the information age. As Crain's Chicago Business' John Pletz reports, in an economy where online latency can cost a lot of money, the city is ideally situated:

"Chicago is one of the half-dozen key vertebrae in the nation's digital backbone because it lies at the center of many of the fiber optic cables that stretch between New York and California, the country's major connection points to the rest of the world via cables under the oceans. Chicago has the third-biggest fiber optic capacity of any metro area in the country, behind New York and Washington. And three of the world's largest data centers are in Chicago or its suburbs."

The challenge is that the city's fiber-optic broadband network -- laid in the late 1990s and early 2000s -- in now stretched to it's limit, Pletz writes. Greater coordination between regional governments and expanding more capabilities beyond the city's central "Loop" area.

The Chicago region's broadband network is an attraction to companies establishing data centers that need instantaneous connections and communications with the rest of the world. For example, Pletz cites the CME Group Inc., which operates the Chicago futures and commodities exchange. Transactions are delivered and sent across the globe in about 79 milliseconds. More than 200 telecom carriers, a number of internet service providers, and many of the world's major financial exchanges rely on a data center housed within a former printing plant in the city.

(Photo: Joe McKendrick.)

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure