Microsoft is putting another $700 million toward its data center infrastructure in the Midwest, expanding its presence in Iowa to help support the growth of services including Xbox Live and Office 365.

microsoftlogoAccording to the Des Moines Register, Microsoft has been revealed as the company behind a large data center project in West Des Moines, known as “Project Mountain.” The identity of the company behind the project had previously been kept secret. The initiative will bring Microsoft’s total data center investment in the state to more than $1 billion.

Microsoft tells the newspaper that the expansion will be used to support “the growing demand for Microsoft’s cloud services.”

The company said previously that it would be backing Xbox Live for Xbox One with some 300,000 servers as it attempts to shift to a cloud-based model for the console. That was before the company relented on the online policies for the console, but Microsoft still clearly has a big requirement for new data center capacity.

AllThingsD notes that Google and Facebook have also been investing heavily in data centers in Iowa.

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  • guest

    Anybody know what level of utilization MS has in its existing centers? Can they really be anywhere near current capacity, far less that plus existing expansion capability? Building out for Office365, if required, makes sense. XBL or Bing, not so much.

  • SteelWorkersGrandson

    Data centers towns: the 21st century coal and steel towns?

    I grew up in a steel town in the now rust belt. In reading about Microsoft, Google, Facebook, Amazon and other cloud providers building data centers in small rural towns I’m increasingly struck by the parallels to coal and steel in rural towns in the past.

    Here like there you’ve got these big companies coming in bringing much needed jobs to small and depressed areas. But the companies are much richer and more sophisticated than the towns they’re moving into. While the jobs are good, that imbalance has the potential to undermine checks and balances on those companies.

    I’m not saying any of these companies are going to willfully put people in dangerous (or deadly) situations or violate environmental laws like coal and steel companies did. But there’s a similar structural thing going on here that could enable history to repeat itself. I’m not a fan of regulation but this is one area where I hope the state or Federal government (better) take an active role in oversight to help balance the power out better.

    If nothing else, these towns should look at these good times as an opportunity to diversify their economies so that when these big companies pull out to save money, they won’t collapse like coal and steel did. The rust belt used to be the steel belt remember.

    • Anna

      This isn’t a manufacturing economy. The initial build out of a datacenter brings construction work, but long term, only a few dozen people are usually needed to staff a modern datacenter. It really isn’t a long term boon to a local economy. While those few dozen employees will likely add, maybe, $4m to the area in spending, that isn’t a windfall. Any community college or big Cabelas store will bring in more money.

      What does benefit the community is that the datacenter company pays for the enhanced infrastructure, electricity, water pipes, fiber, roads that benefit the community long term.

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