It's been known for some time that Iowa was full of corn, pigs, soybeans, etc, but now it's starting to become known for data centers. More interestingly, cloud computing data centers. With cheap electricity (of which 8% of that is wind generated) and lots of land, both Google and Microsoft are building large data centers in the state. Google is buliding out their large DC in Council Bluffs, and Microsoft is putting their's somewhere in the Des Moines area, although we don't know where yet, but my guess will be somewhere south or west. My assumption here will be that MSFT will buy enough land so that they can build their own wind farm, putting their new datacenter on their own power grid. Google (my assumption here again) is doing the same thing. They purchased additional acres south of Council Bluffs, and my guess is to build a wind farm to power their server farm.
So besides the cheap electricity, "huge tracts of land" (said in my best Monty Python accent), what else makes a multi-billion dollar company build infrastructure here? You guessed, TAX BREAKS. The State of Iowa has always given large manufacturing companies incredible tax breaks, like not paying sales taxes on the equipment they use to build and run their facilities or on the electricity that powers them. How cool is that? So the State reworked it's tax code for Google last year in order to help them locate here, so the flood gates are open and to use an old cliche of my grandmothers; "Katie bar the door".
About two days after Microsoft revealed it's "Softwware+Services" model, they announced they would be building a DC here in Iowa. Well even my two year old daughter can add that up. Microsoft is building out a cloud infrastructure in my backyard (metaphorically speaking) and others are starting to take notice. I was recently working with a client on this very same subject. They are a telecom provider here in the state and we all know that that business model doesn't change very often. So I was the advocate of "radical innovation" and telling them that they needed to look at their antiquated business model and see the future. They got it...and so here we go. Other telecom providers in this state wil, I'm sure, start putting plans together to do the very same thing.
Here are some interesting facts about Iowa and how cheap it is to run data centers here: Iowa ranked favorably in a 2008 survey by consulting company Boyd that compared the cost of operating data centers in 45 different U.S. cities. Of the 10 least expensive cities to operate, three of them -- Council Bluffs, Ames, and Des Moines -- are in Iowa. The survey puts the annual operating costs of a newly constructed 125,000-square-foot data center with 125 employees at about $12 million in Iowa compared with $23 million in San Francisco and, at the top of the list, $28 million in New York.
I'll be anxious to see how things come together and see what the finished product looks like. Stay tuned..