Microsoft data center expected to lure others to
Web Posted: 01/19/2007 08:57 PM CST
Express-News Business Writer
To see the possible effect of Microsoft Corp.'s
proposed $550 million data center in Westover Hills, just take a
look at what has happened to Quincy, Wash.
The town of 5,200 residents in Central Washington,
known primarily for its crops of potatoes, sweet corn, onions and
grapes, has become a high-tech boomtown following Microsoft's
decision last year to build its first massive data center there.
"It's diversified our economy," said Pat Connelly,
past president of the Quincy Valley Chamber of Commerce.
Since Microsoft came to town, Internet search engine
Yahoo and software maker Intuit Corp. have selected Quincy for
180,000-square-foot and 120,000-square-foot data centers,
"When one comes, two or three come," Connelly said.
"They try and follow each other."
The entire area has become a hotbed of data center
Nearby, Ask.com is building a data center in Moses
Seattle developer Sabey Corp. is building a $100 million independent
data center in East Wenatche. Google built a huge data center in The
Dalles, Ore., about 150 miles away.
"We've seen land values triple, which is going to
have kind of a negative effect for everyone else," said Tim Snead,
The positive effect is that Quincy has always had a
housing shortage, and since the data center boom developers have
announced plans for 1,000 new homes. The data centers employ
relatively few workers, but Quincy hopes to get more jobs from
support businesses, Snead said.
Unlike San Antonio, Quincy did not offer any
incentives to lure Microsoft or any of the other data center
companies there. Neither did the state.
"It was nothing that we went out and recruited,"
San Antonio gave Microsoft a 10-year tax abatement
and approved the use of $5.2 million from the CPS Energy economic
In Central Washington, data center companies like the
area's hydroelectric power supplied by local utility companies as
inexpensively as 1.5 to 2 cents per kilowatt-hour, Snead said.
Microsoft's Quincy center will use about 48 megawatts of electricity
annually. The San Antonio center will use roughly 44 megawatts.
That compares to the national industrial electric
rate of nearly 9 cents, according to the Edison Electric Institute
At a news conference following Microsoft's
announcement, Milton Lee, chief executive officer of CPS, would not
disclose San Antonio's industrial rate, but said it's extremely
competitive and that's one of the reasons Microsoft chose to locate
here. According to the Public Utility Commission of Texas, CPS'
commercial rate is about 5.4 cents per kilowatt- hour based on the
use of 15,000 kwh.
Microsoft's data center in Quincy, roughly the same
size as the 470,000-square-foot structure planned for
San Antonio, will
go live next month, said Mike Manos, senior director of Microsoft
Data Center Services. Microsoft, whose Redmond headquarters is about
160 miles from Quincy, eventually plans to build 1.5 million square
feet of data center space in Quincy
in six buildings. Manos said the company has a prototype for its
data centers, but he declined to reveal details for competitive
Most data centers resemble giant warehouses housing
tens of thousands of computers with massive air conditioning units,
large backup generators and the latest high-tech security features.
Some of the fortress-like structures have foot-thick walls,
biometric access controls and remote monitoring systems.
Turner Construction Corp. is building the Microsoft
data center in Quincy. Microsoft has not yet selected a construction
company for the San Antonio project, Manos said. It expects to start
construction within two months and finish within two years.
The data center clustering effect happening in
Central Washington is what San Antonio officials hope will happen
The cluster has begun forming.
Lowe's is building a 100,000-square-foot data center
in Westover Hills. At least two or three other projects are looking
at the city for data centers.
Westover Hills developer Charles Martin Wender is
selling 44 acres to Microsoft at 5150 Rogers Road.
Wender predicts Microsoft will attract more data
center projects to the area and create a healthy cluster of
information technology jobs.
San Antonio already has a solid base of home-grown
company data centers, including Rackspace Managed Hosting, Wachovia,
Capital Group Cos. and USAA.