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Microsoft to put data center in Mecklenburg

$499 million investment will bring 50 new jobs to Mecklenburg County. / August 27, 2010
Mecklenburg County has won a high-stakes competition to lure Microsoft’s latest generation data center to the Boydton Industrial Park, a project that will create 50 jobs and bring $499 million in investment to Southside Virginia.

Gov. Bob McDonnell announced Friday that Microsoft Corp. has chosen Boydton over sites in North Carolina and Texas for its most advanced data center, which will use modular technology and advanced cooling mechanics to bolster the technology giant’s cloud computing platform. Cloud computing, hailed as the trend of the future, allows computer users to store data and run applications remotely over the Internet without the need for dedicated hard drives or other network links.

“Microsoft is a household name and securing this global project is a significant economic win for Virginia,” said McDonnell, who described the Boydton project as “the largest economic investment in Southern Virginia history.”

“The company’s search process was long and competitive, and a great team of players came together to show Microsoft that Mecklenburg County was the right fit for its new version of a state-of-the-art data center,” McDonnell said.

The state offered a rich package of incentives to lure Microsoft to the 175-acre Boydton Plank Road Industrial Park, built in 1997 and vacant since. The new data center will serve as Microsoft’s East Coast hub for on-line services and joins other Microsoft centers in Chicago, San Antonio, Quincy, Washington and Dublin, Ireland.

Earlier this month the Mecklenburg County Industrial Development Authority agreed to sell the park for $2 million, and officials cobbled together local and state incentives far exceeding that amount as Virginia and North Carolina emerged as the two main contenders for the project, code-named Deacon.

North Carolina, which previously snagged big data server operations by computer giants Google and Apple, attempted to lure Microsoft to a site near Mebane, N.C. But in the end the software giant opted for Boydton.

“We are incredibly grateful for the support and work of the Commonwealth of Virginia, the economic development team, and local officials in Mecklenburg County, and are excited to announce that we will be building our latest state-of-the-art data center near Boydton…” said Kevin Timmons, general manager of Microsoft Datacenter Services. “This new data center will enable the best possible delivery of services to our current and future customers. My team and I look forward to engaging in the deployment of our latest modular solution in Virginia.”

McDonnell approved a $2.1 million grant from the Governor’s Opportunity Fund to assist Mecklenburg County with the project. The Virginia Tobacco Indemnification and Community Revitalization Commission approved $4.8 million in funds. The Virginia Department of Business Assistance will provide training assistance through the Virginia Jobs Investment Program.

In addition to grants, Virginia has enacted a set of tax breaks over the past two years designed to lower the costs of data centers in the Commonwealth. In 2009, the General Assembly exempted data centers from paying sales taxes on computer servers, routers, and software. In 2010 the legislature broadened the tax break to include chillers and generators, big-ticket items for the next generation of internet-based data centers.

“Our sales tax exemption is considered very competitive,” Christie Miller of the Virginia Economic Development Partnership said in a recent interview. “No other state offers that exemption.”

The Mecklenburg County Board of Supervisors also agreed in July to offer Microsoft an economic stimulus grant of 90 percent of its personal property tax for 20 years in conjunction with the $4.8 million Tobacco Commission grant.

In addition, the Boydton park includes a 40-acre pad-ready site served by the Mid-Atlantic Broadband Cooperative (MBC), which brings fiber optic connectivity to the region. The press release from the Governor’s Office said MBC “provided invaluable assistance to make this project possible” and said its “open-access fiber optic network was a key component in Microsoft’s decision to locate in Virginia….”

MBC “will provide diverse fiber routes for connectivity to major carrier interconnection points in the Eastern United States. Dominion Virginia Power also was instrumental in securing this project. Access to an extremely reliable electric supply and competitively priced electricity from environmentally responsible generation sources were critical site location factors for Microsoft,” stated the announcement.

In addition to full-time employees who will keep the array of high-speed servers operational, the project will also create temporary construction and transportation jobs. An outside construction firm tasked with building the complex has already rented space next to the Boydton Town Office as a base from which to carry out operations.

The data center also will create outside transportation, maintenance and security jobs, over and above the official 50-job estimate.

For its new center, Microsoft will rely on a new container-based design for servers known as an IT-PAC (short for Pre-Assembled Component). “At Microsoft, the IT-PAC serves as the foundation of a broader shift to a modular, component-based design that offers cost-cutting opportunities at almost every facet of the project,” reported DataCenterKnowledge, an on-line trade journal on the data industry, this week. “They are designed to operate in all environments, and employ a free cooling approach in which fresh air is drawn into the enclosure through louvers in the side of the container — which effectively functions as a huge air handler with racks of servers inside.”

DataCenterKnowledge said the modular design “gives Microsoft the ability to forego the concrete bunker exterior seen in many data centers in favor of a steel and aluminum structure built around a central power spine.” The software giant also has announced plans to build a similar center in West Des Moines, Iowa.

Microsoft is locked in a pitched battle with Apple and Google to take advantage of cloud computing, which offers the potential to lower costs for technology-dependent companies and broaden the range of services available over the Internet, from video-on-demand to applications not yet conceived. Microsoft has expanded its cloud computing capabilities with the Windows Azure platform, which the new Boydton center will support.

Local officials were ecstatic after the announcement, which had been rumored for months. In June McDonnell paid an unannounced visit to Boydton to discuss the Microsoft project with local and regional officials, a trip that culminated in Friday’s announcement.

“Mecklenburg County is proud to announce the location of Microsoft in the Boydton Industrial Park,” said Glenn Barbour, Mecklenburg County Board of Supervisors chairman. “The selection of Mecklenburg County indicates that we are progressive and have the necessary tools available to offer in this high-tech age. We believe this selection by Microsoft will give our county the recognition it deserves in attracting future companies that deal in technology.

“I am delighted that the County, the Tobacco Commission, and Gov. McDonnell’s office worked well together for the good of the region,” said state Sen. Frank Ruff, a member of the Virginia Tobacco Indemnification and Community Revitalization Commission. “It is great that a company of the stature of Microsoft has seen what Mecklenburg County has to offer.”

“I am excited and thankful that Microsoft chose Mecklenburg County to locate it newest data center, resulting in new jobs and millions of dollars in investment,” said Del. Tommy Wright, a member of the Virginia Tobacco Indemnification and Community Revitalization Commission. “The future for economic development in Mecklenburg County and Southside Virginia is much brighter due to this successful collaborative effort.”

The Microsoft project will be Mecklenburg’s second major data center by a Fortune 500 company. Hewlett-Packard also operates a data center in Clarksville, having acquired the facility when it acquired Electronic Data Systems (EDS), the original owner of the site. The Hewlett-Packard data center operates under contract with the Department of Homeland Security.

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