Satya Nadella, CEO, Microsoft Photo by Alex Wong/Getty Images
Microsoft CEO Satya Nadella, 2014

New Microsoft Data Center in Iowa Will Be 1.7M Square Feet

Company expects to spend up to $2B on its third West Des Moines facility

While the news that a third massive Microsoft data center was coming to West Des Moines, Iowa, has been out since Wednesday, it wasn’t clear just how massive this future cloud facility will be.

According to an official statement the city issued Friday, Microsoft is planning to erect the server farm in four phases, 256,000 to 583,200 square feet each, adding up to 1.7 million square feet at full build-out.

Microsoft and its rivals in the cloud services space have all been investing billions of dollars in data center expansion around the world to support growth of these businesses. Microsoft is currently ahead of others in terms of the scale of its global cloud infrastructure.

Just this week, on the company’s latest earnings call, CEO Satya Nadella said there would be no hard limit to the amount of data centers Microsoft will build for its cloud.

Read more: Nadella: We'll Build Cloud Data Centers Wherever Demand Takes Us

The company expects to spend between $1.5 billion and $2 billion on the latest Iowa project, generating, at a minimum, $307 million worth of tax revenue for the city and bringing Microsoft’s total investment there to nearly $3.5 billion.

Cities and states often use tax incentives to lure big data center construction projects. In this case, however, Microsoft has negotiated a deal whereby instead of a flat-out tax abatement, the company will use its property-tax money to fund municipal infrastructure upgrades for its data centers in the city, such as power lines, streets, water lines, and sanitary sewer lines.

Find out what other incentives cities across the country are offering in the Data Center World session, "Development Incentives for Data Center Projects," on Wednesday, Sept. 14 from 10:50 a.m.-11:50 a.m.

West Des Moines officials expect these upgrades – which will include 10 miles of new roadway and a new bridge – to help accelerate development on thousands of acres of land in the area.

Iowa is one of a handful of American states where internet and cloud giants have built huge data center campuses in recent years. In addition to the two existing Microsoft data centers in West Des Moines, Iowa is home to Google and Facebook data centers.

These giants have also made big investments in wind farm construction in the state. Both Facebook and Google have signed long-term utility-scale power purchase agreements with wind farm developers in Iowa to compensate for carbon footprint associated with energy consumption of their data centers.

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