Could the Cloud Derail A $300M Data Center?

A concept drawing for the planned $300 million data center to house IT operations for the State of Washington.

A concept drawing for the planned $300 million data center to house IT operations for the State of Washington.

The state of Washington’s decision to build a $300 million data center in Olympia is being challenged by legislators who say the state could save taxpayers money by using cloud computing services.

On Monday the State Finance Committee approved the sale of $300 million in bonds to fund the construction of a new data center and office complex for the Department of Information Services. Plans call for a 160,000 square foot data center with a 160,000 square feet of office space.  

Two state legislators responded with a letter urging Gov. Chris Gregoire to consider other options (link via Crosscut). “We are deeply troubled by the weakness of the technical and financial support behind this decision, and fear the state is potentially making a $300 million mistake that will haunt us for decades to come,” write Rep. Reuven Carlyle and Rep. Hans Dunshee.

“Public sector IT experts predict that within just a few years up to 50% of government agencies nationwide will outsource most data to the cloud,” they write. “The DIS business case fails to seriously explore the larger strategic question facing government technology today.”

The legislators noted that Washington state is “home to many of the leading providers of this rapidly evolving commodity service … Still, our own state government has yet to move in this direction in any material way.” Both Amazon (AMZN) and Microsoft (MSFT) are headquartered in the Seattle area and have in-state data centers that host cloud services.

The Olympia data center projects has been in the works since 2007. While Carlyle and Dunshee assert the project was thinly scrutinized due to yearnings for a large local construction project, their cloud computing proposal may ruffle a key constituency –  state workers in the DIS who would may be fearful of seeing their job duties outsourced to the cloud – or to Microsoft and Amazon.


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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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  1. Matt

    This is idiotic. Politicians are pushing something that they don't even understand what it does. Not even taking into consideration that any business from amazon or microsoft is a bad idea.

  2. nate

    Just what we need, politicians trying to influence IT. I can't imagine those state legislators having even the VAGUEST idea what specifically is going to be put in that data center, and if there's even a REMOTE possibility of putting it "the cloud"(and having it actually work). Especially the Amazon or Microsoft clouds which are extremely limited in their abilities. It's scary that this cloud talk seems to make people like this blindly think "oh yeah just put it in the cloud!" Even for my company's small scale(few hundred systems), we ran the numbers for a basic setup in the Amazon cloud, as well as Terremark, and even managed hosting, and it was waaaaaaaay cheaper to do it ourselves, not to mention the added agility we get with our own gear. Cloud setups are fairly rigid in what they will support. Amazon was something like 3x more costly, Terremark maybe 5-6x(I'm sure most of their costs are VMWare licenses), and managed hosting was about the same as Terremark.

  3. Jim

    Having worked for the State of Washington, and in the IS field, I can tell you that the quality of those IT workers is substantially below that of the commercial industry. Mainly, it is the 25-30% less pay that the State IT workers receive. Anyone with a decent skillset uses the State Employment as a resume builder, then migrates north to Seattle/Bellevue/Redmond to get a "real" IT job, along with the benefits (Stock, Bonuses, higher base). What you are left with is the less motivated IT worker (in general) and state services reflect that. Don't think for a second that your private data is any safer being housed in state run facilities. Security isn't that good (compared to what I've seen at say, Microsoft)

  4. Chris

    I can’t imagine those state legislators having even the VAGUEST idea what specifically is going to be put in that data center You got that right. $300M for a colo facility? Why not just rent out space from existing colos like everyone else does? Then they can move forward and realize that they don't have to hire people that live in the Olympia area and branch out to other places in the state.

  5. Interesting story. I am writing an ebook about companies that have used cloud services as well as those that have decided not to. I'd be interested to hear from any IT managers on this topic. Cheers, Jo (

  6. Scott

    This really isn't even a question of cloud vs build your own. The real puzzling question and issue in my mind is why a State Government would put tax payer dollars into such an expensive facility that is located in one of the worst natural disaster zones in the United States. This is nothing more than a government body trying to build it's own empire while knowingly ignoring that it could someday easily end up in a heap of rubble from an earthquake. Even if they build a supposed "earthquake resistant" data center will their connectivity survive a local or regional event?

  7. Mark

    I do not believe cloud computing would be the best solution for such a large and vast implementation, but I HIGHLY disagree with building a 160,000sq ft data center in such a high natural risk area. Have they ever heard of Eastern Washington?

  8. RSP

    Given the disparity between Cloud provider technical excellence and public sector lower skill, inherent scalability and availability of Cloud services and the cost of on-premise infrastructure the decision to spend $300M on a state run data center should be questioned.