Project Mountain: Microsoft To Invest Nearly $700 Million In Iowa Data Center

Microsoft Corporation (NASDAQ:MSFT) plans to invest nearly $700 million to expand its data center in West Des Moines, the Iowa Economic Development Authority Board said in a statement, adding that it approved $20 million in tax-credit incentives for the Redmond, Wash.-based software giant.

Microsoft will invest $677.6 million, which will be used to expand the company’s existing data center that lies about seven miles west of Des Moines, the statement said.

Christian Belady, Microsoft’s general manager of Data Center Services, said the goal is to support “the growing demand for Microsoft’s cloud services,” AllThingsD reported.

Belady said that the new project, called Project Mountain, will support products such as XBox Live and Office 365, as well as the growing demand for Microsoft’s cloud services. The expansion is expected to create 29 jobs, the development board's statement said.

Microsoft began investing in the West Des Moines data center in 2009, and it owns 40 acres in the western suburbs, Des Moines Register reported.

“This shows their commitment to not only West Des Moines but to central Iowa and the state of Iowa,” Clyde Evans, who leads the city’s economic development efforts, said. “Competition out there is tough but I think certainly the state has some very attractive incentives that make us very competitive out there and the city certainly tries to do as much as we can without giving up the store.”

With the latest investment plan, Microsoft has joined other tech giants who have chosen Iowa as the site for their data-center ambitions.

In April, Facebook (NASDAQ:FB) announced that it would invest $299.5 million to build a data center in Altoona. Google (NASDAQ:GOOG) also said recently that it would expand its data center operations in Council Bluffs. The company announced that it would spend as much as $400 million, bringing its total investment in the area to $1.5 billion.

“We’re seeing a lot of interest in this space. There may be more projects to come,” Debi Durham, the state’s economic development director said, adding that Iowa is attracting such projects as energy is reliable and low-priced, while its incentives for data center development are aggressive.

“We’ve created a business culture that fosters this development,” Durham added.