Oracle Halts Utah Data Center Project

Oracle (ORCL) has halted construction on a $300 million data center project in West Jordan, Utah in a move that appears to be tied to the company's pending acquisition of Sun Microsystems (JAVA).

Oracle's planned Utah Compute Center in West Jordan, Utah. State officials say Oracle has halted construction on the project.

Oracle's planned Utah Compute Center in West Jordan, Utah. State officials say Oracle has halted construction on the project.

Oracle has halted construction on a $300 million data center project in West Jordan, Utah in a move that appears to be tied to the company's pending acquisition of Sun Microsystems. The construction stoppage was reported this morning by the Salt Lake Tribune, with Utah economic development officials saying the company has "put it on hold for a little while" while waiting for the economy to rebound.

Oracle unveiled the West Jordan project last May, when company president Safra Catz said the new facility "will allow us to support our growing On Demand business, as well as the technology infrastructure to support our research and development and customer service requirement." Oracle touted its Project Sequoia design at industry trade shows last summer, and broke ground in October.

Oracle apparently halted construction around the time it offered to acquire Sun Microsystems for $7.4 billion. The deal presents a "buy vs. build" choice for Oracle, as Sun operates dozens of data centers. It's possible that Sun's On Demand business could be accommodated by Sun's high-efficiency Broomfield, Colorado data center or Sun's high-density installation at the SuperNAP in Las Vegas.

The $285 million facility was designed to feature a 179,000 square foot data center, and is projected to employ 100 workers. The state of Utah offered Oracle a tax rebate of more than $15 million, and local government incentives are expected to total nearly $10 million. The facility is expected could result in $73.6 million in new wages over 10 years and $50.4 million in new state revenue over 12 years. Oracle must complete the facility and create the jobs to collect on the incentives.

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