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Microsoft Hardware

Server Farms Flourish In Iowa: Microsoft Plows $700M More Into Des Moines 103

Posted by Soulskill from the go-big-or-go-home dept.
1sockchuck writes "A big chunk of the Azure cloud will be living on the plains of Iowa. Microsoft will invest another $700 million to expand its Iowa data center campus near Des Moines, marking the third major server farm for the state this year. Facebook recently announced a new data center in Altoona. The same day, Google said it would put another $400 million into its facility in Council Bluffs. Why Iowa? Aggressive tax incentives and a central location to bridge the distance between these companies' east and west coast server footprints."
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Server Farms Flourish In Iowa: Microsoft Plows $700M More Into Des Moines More

Server Farms Flourish In Iowa: Microsoft Plows $700M More Into Des Moines

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  • Facts about Iowa (Score:2)

    by Anonymous Coward

    1. It smells like pig crap.

    • you'll hardly ever smell them, thanks to the sweaty corn-fed iowan women

    • Legalized gay marriage in 2009. (Four years earlier than California, and counting...)

      • of course, their "gayest" city, Iowa City, has a single gay bar not much bigger than a minivan. conclusion: Iowa's gay marriage law was a tourist attraction trial balloon.

        • Re: (Score:1)

          by osu-neko ( 2604 )

          of course, their "gayest" city, Iowa City, has a single gay bar not much bigger than a minivan. conclusion: Iowa's gay marriage law was a tourist attraction trial balloon.

          I've given up on hoping people will do the right thing for the right reasons. I'm now content when people do the right thing, regardless.

    • Re: (Score:2)

      by JustOK ( 667959 )

      NOT TRUE! because that IS pig crap that you smell, not something that smells like it.

    • That smell means Chops!

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      1. It smells like pig crap.

      Good thing the only thing that "smells" it is the servers, and smells can't be sent through the Internet, yet.

  • I love the way that the US taxpayer subsidises these huge companies, wish the had the same here in Wales UK.

    • Re: (Score:3)

      by schwit1 ( 797399 )

      It's a symbiotic relationship. If it works out as expected everybody in Iowa benefits.

      • Re: (Score:2)

        by khasim ( 1285 )

        If it works out as expected everybody in Iowa benefits.

        While broadly true, it is also true that the benefits will be very unevenly spread.

        I'm more interested in the total square footage of these data centers and the average/median pay of the employees (also total number of employees). It is probably pays better than farming the land. But data centers usually have lots of servers and very few highly paid/skilled LOCAL workers.

        • TFA mentions $20 million in tax incentives to create 200 temporary construction jobs and 29 permanent ones. I suspect Iowa got taken here....

          Some data centers are going up here in Colorado Springs, largely because of cheap electricity from the city-owned utility. Iowa also has relatively cheap power, which may have been a factor in MS's decision along with tax incentives.

          • I suspect Iowa got taken here....

            No one was really taken. The alternative could very well have been no jobs and no taxes (even if they are at lower rates).

            Generally tax incentives are either no certain types of taxes for X years or reduced amounts of certain types of taxes for X+ years. Most likely it is the later in which less taxes overall are paid for more years. Either way, it is a win for the state because there would be none of the taxes not covered by the incentives, none of the taxes after X years

      • Oh dearie me no (Score:5, Informative)

        by toby ( 759 ) on Saturday June 22, 2013 @04:51PM (#44080861) Homepage Journal

        The only metric being optimised is profit for $BIGCO's owners; the wellbeing and prosperity of Iowans is irrelevant. Ask Indian farmers how Coca-Cola bottling plants (and bottled water plants) are helping THEM.

        You're aware that data centres like this employ about 50 people, right? This is not a business that sustains the local economy.

        Slashdot's libertarian reptile brain really should try harder.

      • Re: (Score:1)

        by osu-neko ( 2604 )

        It's a symbiotic relationship. If it works out as expected everybody in Iowa benefits.

        That's always the propaganda. Sometimes it's even true. The occasional jackpot gives the politicians cover for continuing to engage in crony capitalism without outraging the public too much. I wouldn't even mind that if the payoff occurred more consistently (cf. my previous message about no longer caring if people do the right thing for the wrong reasons, as long as they do the right thing). As it stands, though, crony capitalism seems to cost more than it nets...

    • There is some talk of them subsidising the price manufacturers pay for energy [wsj.com]. If they just repealed the subsidies to the 'green' power companies, they wouldn't have to.

    • I think that is the EU that provides development assistance - and Wales does get support fro larger companies playing the political game why does BT have an engineering centers in Cardiff Belfast and Glasgow?

  • Uh huh (Score:3)

    by 93 Escort Wagon ( 326346 ) on Saturday June 22, 2013 @03:03PM (#44080205)

    Aggressive tax incentives and a central location to bridge the distance between these companies' east and west coast server footprints.

    The first part is really all that mattered to them.

    Come on, "bridging the distance" between the west and east coasts? We all know how fast light travels...

    • Come on, "bridging the distance" between the west and east coasts? We all know how fast light travels...

      We also know that the central states are central.

      That a commercially viable transcontinental infrastructure of roads, railroads and telegraph lines was in place here by1870-1880.

    • Re: (Score:1)

      by mattb47 ( 85083 )

      Also throw in all the other advantages versus hosting in California, New York, or even Washington State:
      Lower taxes with or without the tax incentives

      More relaxed regulatory markets (this is HUGE)

      Relatively cheap electrical power (although abundant hydro power makes Washington State cheapest in the nation: http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a [eia.gov] -- all that rain is definitely good for something)

      Relatively cheap local labor

      • Re: (Score:1)

        by mattb47 ( 85083 )

        Sorry, was looking at residential power prices.
        On commercial power prices, Washington falls to...3rd lowest behind #1 Idaho (more cheap hydro power), and #2 Oklahoma.
        Still not a bad place to be at all.

        Don't try running a datacenter in Hawaii. OUCH!

    • Re: (Score:2)

      by fermion ( 181285 )
      On one hand, giving tax incentives to locate where no one want to be makes sense. Iowa is in the bottom quartile of US in terms of population density, but around the midpoint, for example, of interstate highway. While transportation of produce justifies some of that, they need some commerce to support the cost. Iowa has half the GDP per mile as, for instance, Texas.

      There is also some benefit to a central location. Light takes about 5 milliseconds to travel one thousand miles. That means that maybe

    • With perfect light speed transition (so not including routing and other delays) putting the server in Iowa will save 7ms ping from one coast to the other. Reality is going to be more like 15-20. I don't see that alone being worth it for the likes of facebook, but if you were running the servers for a fast paced action game it would certainly be something to think about.

      • Ping time isn't nearly as important as the hop count and peer count. If someone in Texas tries to access your New York servers, they're probably going through the networks of half a dozen different companies, and that's half a dozen interface points that could go wrong. For a centrally-located server, there might only be two or three networks in the path, so the service is likely to be more consistent.

  • I always wonder why M$ refers to their business centers as a "Campus" when it's nothing more than a factory and/or business center and/or sweat shop for programmers.

    The image that comes to mind, of an M$ programming group, or "campus", or whatever you may wish to call them, is the scene from Meet the Robinsons, of the future world of Doris the Bowler Hat.

    • Re: (Score:2)

      by hsmith ( 818216 )

      sweat shop for programmers

      lmao, yeah - working in air conditioned buildings, generous pay, vacation, benefits - exactly like sweat shops.

      I bet you also think the NBA is a modern day slave system too.

    • Re: (Score:1)

      by osu-neko ( 2604 )

      I always wonder why M$ refers to their business centers as a "Campus"...

      campus [noun]
      ...
      5. a large, usually suburban, landscaped business or industrial site.

      I'm going to venture a guess that when they refer to one of their business centers as a "campus", it's because it is large, possibly suburban, and landscaped.

  • quality of life indicators [cnn.com]

    If you compare Des Moines to the the average of the 100 best cities this tool has data for, Des Moines has a lot of crime, terrible education, and not a lot to do. All it seems to have going for it is short commute times and a low cost of living. Even the financial incentives aren't that great in my opinion. The average home price may be $100,000, but the median familyincome is only $55,000. Considering fuel, groceries, and utilities (probably expensive because of hot summer
    • 'where is the talent going to come from?' Local I would imagine. Since it's only going to create 29 jobs in the city, surely there are 29 local people that are qualified to work in a DC with the six colleges nearby from your cited link. I doubt anyone would want to uproot and move there that didn't have pre-exiting ties.
      • You are probably right. I'm sure they can find some people willing to stick around because of family ties.

  • IBM Plans New Center in Iowa (2009) [wsj.com]: "The terms of the deal underscore how coveted new jobs are among the states at a time of rising unemployment. Iowa is paying up generously to attract the plant. Mike Blouin, president of Greater Dubuque Development Corp., said it is providing "a $55 million package." That includes an $11.7 million loan from the state that will be forgiven if IBM maintains the jobs for two years.Local community colleges will pay IBM $10 million for job training expenses for its employees.

    • "Local community colleges will pay IBM $10 million for job training expenses for its employees" Seriously? Since colleges should have educated individuals teaching students the same skills IBM probably wants, why can't the college just put the employee in their own class at no cost? I understand there will be product specific ins and outs, but that is what documentation is for. Someone with a reasonable amount of education or experience in the field shouldn't require much training. Am I missing something o

  • They get a $20 million tax refund in exchange for "creating" 29 jobs in the state.

    Perhaps those 29 new employees (and the state) would be better off if the state gave each of them $689,000 and they could invest in their own new businesses instead?

    • I would mod this up if I could. That is a good point.

      • Re: (Score:3)

        by vuke69 ( 450194 )

        No, it's a completely idiotic point.

        It's $20M in taxes that they wouldn't have seen anyhow if the datacenter was built in another state. But the state gains from all the income, sales, property, etc. taxes that the employees pay.

        No matter how big the tax break, it's ALWAYS a net gain to the tax base.

        • Not necessarily. How much growth is there going to be from a data center? Giving tax breaks to businesses with more growth potential would produce bigger long term gains for the state.

        • No matter how big the tax break, it's ALWAYS a net gain to the tax base.

          Except in the frequent case that the company winds up impacting services more than providing benefit, for example due to additional traffic and road wear.

    • I agree it's questionable, but giving 30 people some cash to start a new business is hard to do (who gets the cash? why?) and it requires actually having the $20 million, whereas giving some big company a $20 million discount on taxes due is quite a bit easier. You also have to look at the time factor.. $20 million off taxes one year in exchange for creating 30 jobs for how many years? at some point it becomes well worth it, maybe 10 or 20 years though.

  • There's also the issue of the backbone that's installed. There was a very serious push by McLeod a while ago to get heaps of fiber in the ground, but much of it lay dark once it was installed. McLeod went bankrupt, but having all that fiber in the ground also has to be a consideration.
  • I moved from California back to Iowa, where I grew up, to get away from becoming a colony of India. Now where do I move?

    • Re: (Score:1)

      by Anonymous Coward

      I moved from California back to Iowa, where I grew up, to get away from becoming a colony of India.

      I thought California was becoming a colony of Mexico.

    • Well, your plan made sense. There probably aren't many Indians in Sioux City.

      • Re: (Score:2)

        by Baldrson ( 78598 ) *
        Does that the culture that produced guys like Noyce can have its own reservation? Can it have as much land as the Sioux?

    • Re: (Score:1)

      by osu-neko ( 2604 )

      I moved from California back to Iowa, where I grew up, to get away from becoming a colony of India. Now where do I move?

      Perhaps you should stop hating Indians so much that you feel the need to move away from them.

      • Re: (Score:2)

        by Baldrson ( 78598 ) *
        Hmm... so if I don't want to live in someone else's culture -- indeed if I want to preserve the culture in which I was raised, I must hate the other's culture. Do I have that right?
  • Azure has made some incredible strides in recently months. They announce new features almost every week. I can't wait to see more at Build 2013. My company has slowly been moving more and more resources into Azure and out of our own datacenters.

  • Iowa has huge amounts of wind energy to power those servers.

  • Quantum Communications is the technology that games changes the current physics everyone! So Iowa wii retain the millisecond advantage despite your thoughts.

    Iowa has clear footprints from a dominate market share situation.

    Of the major cloud players or economic participants:
    1. Google
    2. Facebook
    3. IBM Dubuque and yet to be announced
    4. Microsoft
    5. Terremark TDS

    Absent but probably wondering or searching for Iowa locations:
    1. Rackspace
    2. Apple
    3. Amazon
    4. Hewlett Packard and its EDS division with Des Moines hub n

  • In towns in central Iowa there's a standard saying about Des Moines: "They ruined seven or eight good farms when they built Des Moines."

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