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Microsoft takes Iowa from corn to .com

Patrick Thibodeau | April 21, 2014
Microsoft is building some 1.16 million square feet of new data center space in Iowa.

Star Trek fans know that Capt. James T. Kirk will eventually be born in Iowa. So, in one respect, this state already has a notable tech reputation.

Now, it has another.

Microsoft is building some 1.16 million square feet of new data center space, Iowa officials said Friday. This is Microsoft's second data center in West Des Moines.

Microsoft's other data center, which is being expanded, is now at about 300,000 square feet, said Clyde Evans, West Des Moines' director of community and economic development. It's also about 7 miles away from the planned facility.

State officials put Microsoft's total investment in their state at more than $2 billion. It will also cement Iowa's reputation as a data center hub state.

The primary reason Microsoft and others including Google and Facebook are interested in Iowa, said Evans, is that the state sits stop some major transcontinental fiber routes. It also has low electric power rates, which for a large user, may be 3 cents to 4 cents per kWh.

Something else that may have appealed to Microsoft, said Evans, is an investment by utility MidAmerican Energy in wind energy, which has made it one of the largest wind power generators in the U.S.

For all its size, the Microsoft data center will only employ about 80 people. Data centers, generally, are not big job generators. But the jobs they do create "tend to be very well paying," said Evans.

But data centers have very high property tax valuation, "and they are not a big drain on municipal services, they are not big users of police, fire, EMS or public works services," said Evans. "They are a kind of cash positive operation for the community."

Large data centers, which are used to support cloud operations, tend to cluster. Facebook opened a data center in Altoona, Iowa and Google has spent more than $1 billion in data center development so far in that state. North Carolina is another state that has drawn sizeable data center development.

 

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