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Microsoft Plans $1 Billion Server Farm In Iowa

Posted by timothy on from the plenty-of-ethanol-to-go-around dept.

1sockchuck (826398) writes "Microsoft will invest $1.1 billion to build a massive new server farm in Iowa, not far from an existing data center in West Des Moines. The 1.2 million square foot campus will be one of the biggest in the history of the data center industry. It further enhances Iowa's status as the data center capital of the Midwest, with Google and Facebook also operating huge server farms in the state."

11 of 86 comments (clear)

  1. Saves about $38 million in taxes by dbIII · · Score: 5, Insightful

    Makes sense, it saves about $38 million in taxes which you guys are going to have to cough up instead of Microsoft.

    1. Re:Saves about $38 million in taxes by manquer · · Score: 4, Insightful

      Very rarely the number of people directly employed makes the difference, If Microsoft is spending $1 Billion in the state, it will probably source significant % of components locally( usually part of any tax break agreement), that will generate lot of business for the local economy, the vendors will in turn will be ordering components, magnifying the effect on the economy, the state tax on all these other transactions will perhaps offset the breaks given to Microsoft.

      On the other hand, paying 84 people for 6 years will do very little for the economy by itself

    2. Re:Saves about $38 million in taxes by Charliemopps · · Score: 3, Insightful

      All states do this. To attract big projects each state offers lower taxes for a period of time, free or discounted utilities, temporary changes to regulation etc... Whomever makes the best offer gets the facility. The state will collect far more than $38 million from the people that work there's income taxes alone. Not that the state/city can't make mistakes if they're stupid... but this deal isn't bad for the state at all.

    3. Re:Saves about $38 million in taxes by Anonymous Coward · · Score: 2, Insightful

      I'm self-employed. Because of higher taxes (I live in Quebec, where the government is finding new ways to tax people every year), gas price and a higher cost of living in general, I had to raise my hourly rate in order to have the same standard of living. So when you think about it, it means it's not me who is paying my taxes, but "you guys".

      You think big corporations are different? You think they pay their taxes out of their pockets?

    4. Re:Saves about $38 million in taxes by TubeSteak · · Score: 4, Insightful

      The state will collect far more than $38 million from the people that work there's income taxes alone.

      Microsoft will create 84 jobs when fully built out, with 66 of those jobs required to have a wage of $24.32 an hour.

      $24 an hour is ~$40,000 after federal taxes and social security.
      According to my math, at Iowa's 6.8% tax rate, it'll only take ~208 years to recoup $38 million in personal income taxes.

      Those other 18 jobs are undoubtedly for security guards and janitorial staff, at an even lower wage.
      So don't count on that to noticeably bump up the average.

      TLDR: Microsoft is getting a lot of tax breaks and subsidies in return for bupkiss.

      --
      [Fuck Beta]
      o0t!
    5. Re:Saves about $38 million in taxes by ColdWetDog · · Score: 3, Insightful

      Corn chips, memory chips. To a politician it's all the same.

      --
      Faster! Faster! Faster would be better!
    6. Re:Saves about $38 million in taxes by PNutts · · Score: 3, Insightful

      On the other hand, paying 84 people for 6 years will do very little for the economy by itself

      Strippers and fast food restaurants disagree.

  2. Re:Why 1.1 billion? by Anonymous Coward · · Score: 2, Insightful

    Dollars are a measure of importance. If such an encrusted Pi were actually constructed, it would indeed be newsworthy.

  3. Re:Why 1.1 billion? by RabidReindeer · · Score: 3, Insightful

    Dollars are a measure of importance. If such an encrusted Pi were actually constructed, it would indeed be newsworthy.

    Dollars are speech. Just ask the US Supreme Court.

  4. Yawn. by sirwired · · Score: 4, Insightful

    It's hard to understand why, after all these years, local and state governments STILL haven't figured out why it's pointless to spend one thin dime of tax incentives on projects like this. They persist in visions of row upon row of cubicles filled with hard-working, high-paid, tax-paying programmers. When, in fact, after construction, the total payroll is little different from a simple warehouse or small wholesale distro center that they would never consider paying any incentives to attract. The data center might have a half-dozen or so skilled tech workers, if that, and the rest of the staff are going to be low-paid parts-swapping monkeys. The "real" work will all be done remotely. If you have a limited incentives budget, why spend it on a data center?

    Moreover, unless the community is blessed with a large amount of "spare" power (like areas with oversized nuc plants or the cheap hydro in the Northwest) all that grid capacity going into a power-hungry, job-poor, data center could be better spent on other projects.

  5. Is it far enough away ? by Alain+Williams · · Score: 3, Insightful

    The project Alluvion site is approximately 8 miles east from the current Microsoft data center in West Des Moines

    8 miles is not far. It is not too hard to envisage a disaster that could affect both sites at once. For starters: Iowa is smack in the middle of Tornado Alley. They are close enough that power supplies and Internet connections will be 'related'. OK: it makes it easier for staff to visit both sites, but 80 miles seems to me safer than 8.