Microsoft Chooses Southern Virginia for New Cloud Data Center

The massive, global build out of cloud computing data centers by major IT vendors continues with the news that Microsoft will spend half a billion dollars to construct a huge, modular facility in southern Virginia.

Virginia Governor Bob McDonnell announced the Microsoft data center last Friday in a press release that boasted about winning the facility over competition from North Carolina and Texas. But the win also underscores the hoops that local governments must jump through to get the mere 50 new jobs that the facility is supposed to create.

"The company’s search process was long and competitive, and a great team of players came together to show Microsoft that Mecklenburg County was the right fit for its new version of a state-of-the-art data center," McDonnell said in a statement. "This project represents the largest investment project in the history of Southern Virginia."

Here’s what it took to bring Microsoft to the site near Boydton, Va.:

• A $2.1 million grant from the Governor’s Opportunity Fund.
• $4.8 million from the Virginia Tobacco Indemnification and Community Revitalization Commission.
• A promise of training from the Virginia Department of Business Assistance through the Virginia Jobs Investment Program.

Other major requirements by Microsoft were bandwidth and power from public-private partnerships and utilities. The Mid-Atlantic Broadband Cooperative is providing open access to its 800-mile fiber optic network that "will provide diverse fiber routes for connectivity to major carrier interconnection points in the Eastern United States," the release noted.

Meanwhile Dominion Virginia Power worked with Microsoft to assure the company of an "extremely reliable electric supply and competitively priced electricity from environmentally responsible generation sources." Dominion has access to electricity generated by a dam at Kerr Lake, which straddles the Virginia-North Carolina border only a few miles from Boydton.

Public officials in southern Virginia obviously hope that Microsoft’s decision to locate in Mecklenburg County will mark the first raindrops in a flood of high-tech jobs to the region. The county of nearly 32,000 people has slowly lost population this decade and only 12 percent have bachelor’s degrees or higher, compared to about 30 percent for the state as a whole, according to the U.S. Census Bureau.

"Microsoft’s decision to locate in Mecklenburg County is a huge investment in the area that will bring much needed economic activity and development to the region," said Delegate Terry Kilgore, chairman of the commission that provided the $4.8-million piece of the investment.

Virginia’s $7-million-plus investment could wind up buying some short-term construction contracts and 50 high-paying jobs, or it could spark the next Research Triangle Park, N.C. But some local economies are a lock to be stimulated by the Microsoft Gen4 data center project -- Silicon Valley and Round Rock, Texas. By resuming its spending spree on massive data centers, Microsoft will be buying custom servers from Hewlett-Packard and Dell, along with storage and networking gear aplenty.

Posted by Scott Bekker on September 01, 2010