Late on Friday, the Iowa Economic Development Authority Board approved $20 million in tax-credit incentives for Microsoft, which announced plans to invest nearly $700 million in a data center initiative in West Des Moines, Iowa. Reportedly, Microsoft will use the funds to expand their current data center presence in the region into a larger data center campus. The Des Moines Register is reporting that Microsoft has already purchased the necessary land to suit their expansion needs.
According to Christian Belady, Microsoft’s GM of Data Center Services, the goal of the investment is to “support the growing demand for Microsoft’s cloud services.”
The Big Three
Microsoft is not the only large enterprise-level data center investment to hit the region in the recent memory. In April, Facebook announced plans to invest $300 million in a massive 476,000 SF data center in Altoona, Iowa. Additionally, in 2009, Google made an initial splash in the state with its data center in Council Bluffs, and has recently announced expansion plans.
Iowa has increasingly become an attractive market for data center initiatives. There are numerous factors that have led to the regions place in the spotlight. Taxes. Taxes are a big contributing factor when it comes to the “short list” and Iowa is no slouch in that department. The state does not charge a tax on electricity. Secondly, for this specific deal, Iowa approved $20 million in tax incentives for the project.
Additionally, the state offers relatively inexpensive land when compared to other states vying for data center initiatives. Lastly, Iowa has built a track record of success when it comes to landing and retaining data centers, company headquarters, and corporate offices. The longer that track record remains untarnished, the more comfortable large-scale corporations (such as Facebook, Google, and Microsoft) can feel that they have minimized risk throughout their decision making process.
Growth begets growth, and Iowa is flexing it muscles. It may not yet be on the level of North Carolina and Oregon, but it certainly is not far behind, and is a region that commands respect in the data center marketplace.
“This shows their commitment to not only West Des Moines but to central Iowa and the state of Iowa,” said Clyde Evans, who leads the city’s economic development efforts. “Competition out there is tough but I think certainly the state has some very attractive incentives that make us very competitive out there and the city certainly tries to do as much as we can without giving up the store.”