Microsoft To Invest $700 Million In Iowa Datacenter After State Legislature Approves Tax Credits

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Microsoft looks at tax law very carefully in everything it does and datacenter locations are no exception.  Microsoft originally planned on building a datacenter close to headquarters in Washington State, but scrapped plans after changes in tax law were made. The Iowa Economic Development Authority Board  approved today $20 million in tax credits for Microsoft, which plans to invest nearly $700 million in a data center in West Des Moines.  The board said Microsoft was behind “Project Mountain” at a meeting this morning.  Microsoft’s latest expansion pushes its investment to nearly a billion dollars. It would become the third big tech company to push its data center investment to $1 billion or more. Leaders say the Microsoft project will support products like XBox Live and Office 365. Microsoft’s Christian Belady said in a statement: “The expansion supports the growing demand for Microsoft’s cloud services.” The project represents “our latest in efficient data center thinking.”  The Redmond, Wash., software giant began its investment in West Des Moines in 2009, board member Pete Brownell said. The company owns 40 acres in the western suburbThe company employs about 50 people, local officials say.  The West Des Moines City Council last week approved a five-year tax rebate that could reach nearly $6 million for the project. Microsoft’s investment — $677.6 million, state documents showed Thursday — comes on the heels of Facebook’s announcement two months ago that it would invest $300 million in an Altoona data center. The investment is expected to grow to $1 billion over six years.  And Google is pushing its data center investment in Council Bluffs to $1.5 billion.

Iowa has been attempting to attract data centers to key cities in the state. Under the state incentives, Microsoft will be eligible to receive up to $20 million in tax credits, including $15 in a sales and use tax refund paid during construction and a $5 million investment tax credit, for completing the $677.6 million capital investment project in West Des Moines. The project expansion will house servers, networking equipment and office space needed to operate Microsoft’s cloud services, Greater Des Moines Partnership said in a statement. Necessary infrastructure improvements to the West Des Moines location requiring additional capital investment will support the expansion, such as fiber and roads, it added. Microsoft operates a large number of data centers in many parts of the world. For its Windows Azure service, for example, it offers services from data centers in Singapore and Hong Kong in Asia, Ireland and

Here’s a review of the timeline for the West Des Moines project:

  • June 30, 2008: confirmation of Iowa as the selected data center site
  • August 21, 2008: Microsoft announces the location in West Des Moines and says they will use their latest design strategies.
  • January 23, 2009: Microsoft announces that the Iowa data center will be postponed
  • June 8, 2010: Microsoft dusts off the Iowa data center plans and says they will scale back the development to a $100 million project
  • December 2010: The Des Moines Register reports that the West Des Moines city council has given final approval for the project.

Source: Datacenter Knowledge and Des Moines Register



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Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • blau34

    But no one from Europe(Primary Germany) will ever Host Importend stuff in an us based cloud. After the last Desaster.

  • oldphart84

    Sometimes it works out. However, this often increases the tax burden on the little guy. I hope it works out. Some cities or states cannot afford to do this. The problem with things like this, for example, would be letting states set their own environmental laws. Industry would move to the states with the least environmental protection thus destroying the environment for future generations.