Apple Plans $1 Billion iDataCenter

1sockchuck writes "Apple is planning a major East Coast data center to boost the capacity of its online operations, and may invest more than $1 billion in building and operating the huge server farm. That's nearly twice what Google and Microsoft typically invest in their massive cloud computing centers. The scope of the project raises interesting questions about Apple's plans, and has politicians in North Carolina jumping through hoops to pass incentives to win the project. The proposed NC incentives build on a package for Google that later proved controversial."

Comments

Tax breaks for the rich?

[Anonymous Coward]

From TFA:

would offer income tax breaks to companies that invest more than $1 billion over nine years

Why should a company receive more tax breaks because they've gotten big enough to be able to drop $1 billion on a data center? If they can afford $1 billion, they can afford whatever taxes apply. How about you cut the taxes for small companies who struggle because of monopolies like Apple? Stop helping the companies who obviously don't need the help, and start helping the businesses who are risking having their doors closed forever because of a shitty economy.

Frankly, I'm sick of seeing the rich get the gold platter treatment.

Re:Tax breaks for the rich?

[Darkness404]

Its simple, this will create jobs. Apple is going to hire a massive amount of contractors to build this, probably have to hire some consultants, have to buy the hardware, etc. All this goes to help other companies and the economy. Honestly, it makes more sense to just abolish most taxes and establish a pay-per-use system and abolish all government granted monopolies, but thats just me....

Re:Tax breaks for the rich?

[larry bagina]

They're also big enough that they can build their data center in any other state.

Last year, Maryland raised marginal tax rate on millionaires. This year, the number of millionaires in Maryland dropped by 30% and total tax revenue collected from them dropped as well.

You can complain all you want, but if you look at the numbers you'll find the top 1% of earners pay 40% (or more) of income taxes.

Re:Tax breaks for the rich?

[j1mmy]

Business taxes should be the first to go, because businesses don't pay taxes. Their customers do. The only thing governments accomplish when they tax businesses is they raise the cost of goods and services.

Re:Tax breaks for the rich?

[Fastolfe]

This isn't about helping Apple. It's about helping the local communities that would benefit from Apple building a massive datacenter there. Local people get hired to do the construction. Some get hired to operate it. Others relocate just to work there. These workers need housing, restaurants and retail. This is money that flows from Apple, to its employees and contractors, to your town's businesses, to your town's residents. If you want your local economy to improve, it's in your best interests to give companies like Apple an incentive to build in your town, instead of someone else's. This means things like tax breaks.

Re:Tax breaks for the rich?

[McGiraf]

If the wealth is more spread you do not see billionaires moving out of a state to go to a less taxed state. They have to much money and to much power. If it keeps up like it's going now this 1% will pay more than they pay now, but they will have 99% of the wealth. This is not sustainable. Let them all move to Monaco.

Re:Tax breaks for the rich?

[LordNimon]

Last year, Maryland raised marginal tax rate on millionaires. This year, the number of millionaires in Maryland dropped by 30% and total tax revenue collected from them dropped as well.

Are you implying that many millions in Maryland left for other states because of the tax? Have you considered that perhaps there were many millionaires who lost a lot of money, and therefore were no longer millionaires?

Re:Tax breaks for the rich?

[slamb]

Last year, Maryland raised marginal tax rate on millionaires. This year, the number of millionaires in Maryland dropped by 30% and total tax revenue collected from them dropped as well.

You seem to be trying to lead readers into believing that the tax increase caused the drop in millionaires. If so, you're badly mistaken or dishonest, and judging by your post's score some people were stupid enough to fall for it.

Correlation is not causation! larry bagina failed to mention other, more significant factors. Namely that we're in a recession! The S&P 500 index went down 36% between 2008-01-01 to 2009-01-01! Many, many, many people's income and net worth has gone down (though not all of us were so lucky as to be above $1 million to begin with), and tax revenue has fallen all across the US! Several major states are broke! Given the economic climate, it's ridiculous to even suggest that the tax increase is at all related to the drop in millionaires without doing much better, such as:

• showing theoretically that the tax increase was significant enough to cause so many people to no longer be millionaires.
• showing that many millionaires have moved out of Maryland.
• using a comparable state with no tax increase as a control, demonstrating that Maryland's fall was much greater. (This is hard, though, because there are so many things different between states, so it's a tough argument to make that another is "comparable".)

Re:Tax breaks for the rich?

[Anonymous Coward]

B) In any reasonably free market, where price elasticity of demand is neither infinite nor zero, any tax break (or tax) will be split between the business and the consumer. The business can sell more by lowering its prices (and you can bet its competitors are interested in doing the same too).

Now, that said, you probably don't want business taxes to be zero, because businesses cost the state money one way or another. It would be better for the costs to be in line with what what they pay. You'd also like things to be reasonably fair, and not have one business pay all sorts of taxes while another gets things for free, otherwise you're just distorting the labor market and making business success a function of lobbyists, friends in government, and political popularity, rather than business merit.

Re:Tax breaks for the rich?

[cowscows]

If you eliminate business taxes, then customers are still going to pay those taxes, the government is going to get that money somehow. It's just that instead of paying through the purchases of goods and services, we'd get taxed directly to make up the difference.

I'd prefer that the businesses pay for their share of the nation's infrastructure via taxes. Sure, they're going to pass that cost along to me in their prices, but then when I'm spending money, I'm making a more informed decision, because what I'm being charged better reflects the true cost of the production of those goods/services.

Re:Tax breaks for the rich?

[jo42]

You completely missed the point.

Millionaire A stays, and pays more money. Millionaire B leaves, and pays less amount of money in a different state.

Re:Tax breaks for the rich?

[McGiraf]

The point, if you ignore the Monaco part, it's that if the wealth is mostly controlled by a few they have the power influence legislation to accommodate them by threatening to leave (people or corp.). By using this power they grab even more of the wealth and more of the power. Better ditribution of wealth prevents this from happening.

Re:Tax breaks for the rich?

[ceoyoyo]

Correlation is not causation!

Wow, I hate that sentence. I don't think I've ever seen it used properly here. The correct objection in this case is: "one data point does not indicate a correlation."

If the OP watches Maryland raise and lower taxes many times, and if the number of millionaires in Maryland tracks well enough to yield a strong probability that a correlation exists, THEN you may object that correlation does not imply causation. Although in that case you're arguing that a third factor consistently both causes Maryland to raise taxes and millionaires to leave.

Re:Tax breaks for the rich?

[Atlantis-Rising]

No? Put it this way, would you rather have your full salary (say $150,000) in Somalia or $75,000 in wherever you live?

Because that's what the $75k is paying for- the difference between the modern, first-world nation where you live and Somalia.

Re:Tax breaks for the rich?

[Macrat]

B) In any reasonably free market

All things are possible in fantasy land

Re:Tax breaks for the rich?

[Naturalis Philosopho]

Visit someplace like Somalia. See how you like it. Try driving your BMW on their roads. Have fun getting a reliable phone, let along internet connection. You may have fun in your villa until your security guards start upping their fees or if you want to walk to the market without an armed escort, then you'll appreciate what you have in the U.S. Any one else find that the "don't tax me" crowd seems to be the people who've led the most insular lives and don't know how 98% of the world lives?

Re:Tax breaks for the rich?

[adolf]

But for a datacenter? Particularly one which exists to serve but one company's products? How, exactly, does this attract other companies to an area?

In your IBM example, it is pretty plain that other companies had a strong desire to be geographically near to IBM. The reason is obvious: It's easier to sell stuff to the guy across town, than it is to sell it to the guy across the continent.

Therefore, it made sense for companies that either had existing business with IBM, or would like to do business with IBM (or any business that might support any of these entities, and so on) to set up shop next door. But, again, a datacenter? Stuffed full of Apple hardware to support Apple's computing cloud?

There's a reason why the place will only employ 100 -- it's a datacenter! You've got cable monkeys, parts-swapping monkeys, HVAC monkeys, and janitorial (hell, you might even class all of these roles into "janitorial"), plus some management to deal with them. And that's...all. Everyone else associated with such a datacenter will be just as able to do their work over the network from anywhere, as they would from an office in that building.

The folks working at that datacenter won't be decision-makers. They won't be buyers. They won't be marketers. They'll just keep the thing running.

How, again, does this help encourage growth in that area? I mean, sure: Spending $1 billion on a new datacenter is sure to get the union trades all hot and bothered over bidding on the construction, but once it's built, who cares?

Unlike traditional manufacturing, their product is a long series of bits on teh Intarwebs. There aren't mountains of raw materials coming on by truck and rail and leaving as finished products on pallets. There is no major consumption of goods. About the only thing that changes, once it's built, is that the power company will have shored up their services a bit to serve the area, the telephone company will have a few more circuits to look after, and a paltry 100 people will have a new job.

Welcome to 2009.

Re:let me guess

[rwwyatt]

Good Luck finding virgins in North Carolina! oh Wait, There must be 72 slashdotters somewhere in NC.

The states don't win on these deals....

[nrasch]

It cracks me up to keep seeing states jumping through hoops and giving away all sorts of tax revenues for these big companies to set up shop. Then, later on, the company reveals that only about 30 jobs are going to be created in actuality, and the state has lost more than if they had just let the deal pass them by.

I have yet to hear of a happy ending for one of these deals for the state, and I'd be happy to be corrected if some one has a link....

Re:The states don't win on these deals....

[neoform]

How easy do you think it is to move a $1,000,000,000 data center? I'd venture to say it's not even possible without spending more than the actual cost of the center.

Surprise?

[Longjmp]

So, Apple is changing from a hardware company to a media company. Who would have guessed that after iTunes, iPods and iPhone (iPad next?) Seriously.

Re:let me guess

[Laxori666]

I like how this was modded "insightful".

Re:let me guess

[maxume]

Yes, but why was this modded insightful?

Re:We consumers need to demand new power

[dhavleak]

If you think about it, data centers in the US must be Green.

Especially if they are built by Google, MSFT, or Apple.

We should demand that 100 percent of the anticipated max power draw of all "needed" data centers come from new construction of alternate energy sources - e.g. tidal, solar, wind, geothermal,hydro - that is literally BUILT in America to provide new power.

The days of power centers being built as if it doesn't matter that they contribute to global warming and help fund terrorists are over.

Umm.. you (we) don't need to *demand* anything here. Operational cost is the single most important metric of operating a datacenter. More so than even storage cost (which is a contributing factor to operating costs). Any company operating datacenter(s) is already looking into every manner imaginable to cut the cost of powering it. If a non-green cost is significantly cheaper, the company will simply not go green. If you tax stuff to make greenness more attractive (say a carbon tax) they will automatically shift to green sources. If the green source is cheaper to begin with, they will go green all the way.

For the environmentalists -- don't spend cycles on forcing people to adopt stuff that doesn't work for them. People in general want to do the right thing. You just have to spend your cycles on making the green thing the right thing. Make the environmentally friendly option equal to or cheaper than the non-environmentally option, and people will automatically do the right thing.

Re:Streaming Gaming

[neoform]

They better work on battery life then. If I play games and use the internet on my iPhone for more than an hour I've taken about 50% of my battery away.

Re:let me guess

[Thinboy00]

I love how you were modded "informative".

Re:let me guess

[Jared555]

Yeah, probably should have been redundant because there is no new information in either his or the parent post.

Re:let me guess

[Anonymous Coward]

Moderators went berserk O_o

Re:dollars != capacity

[Anonymous Coward]

If you knew anything...and you don't...you would know two things. One is that Microsoft puts their money for this sort of thing in India or whatever third world hell hole is cheapest for them this week. Google builds their own boxes. Google it.
Apple uses lots of non-Apple hardware since they only make departmental servers. Finally, and stay with me here...this is bigger than anything Microsoft has done in the U.S. for a long time. Do you understand now or should I draw it in crayon?

Re:let me guess

[Anonymous Coward]

c-c-c-c-C-C-COMBO BREAKER!!! seriously. if this gets modded insightful, i loose my faith in humanity.

Re:let me guess

[Anonymous Coward]

Granted, but how was THIS modded insightful?

I sense a neverending thread coming on.

This is the song that doesn't end...