Microsoft's $750 million data center investment in Wyoming

Michael Kassner
Updated

 Image: Microsoft

Wyoming has a lot going for it, including being a seemingly good location for data-center operations. Case in point, Microsoft representatives and Wyoming's Governor Matt Mead announced on February 17, 2015 Microsoft's up to $200 million data-center expansion near Cheyenne, Wyoming. "If you had told me four years ago that a company would be investing three quarters of a billion dollars in Wyoming and it had nothing to do with minerals, tourism, and agriculture it would have been hard to believe," mentioned Governor Mead.

He was referencing that this was Microsoft's third data-center expansion since 2011-12 in a business park owned by Cheyenne LEADS. "It is gratifying that Microsoft is here and expanding yet again," said Randy Bruns, CEO of Cheyenne LEADS. When asked to explain Microsoft's affinity for the area, Bruns felt a big part of it was Microsoft realizing the state delivers on its promises.

What does Wyoming promise?

The enthusiasm starts with Governor Mead. "I believe Wyoming is positioned to be a leader in the technology sector, and data centers will be a catalyst for growth," adds Mead. "Wyoming is a perfect fit for data centers. We have abundant, affordable energy. Our naturally cool climate decreases costs for data centers and we have redundant fiber optics."

Mead was right about Wyoming's climate conditions. According to NOAA's climate data, Wyoming has the fourth coolest yearly average temperature in the country -- that allows data-center operators to use free-cooling technology year-around, saving on electrical costs, which are low to begin with. Wyoming, the largest producer of coal in the country, benefits by also having the lowest electricity prices in the US -- less than six cents per Kilowatt hour.

With only half a million residents in the tenth-largest state, population centers are sparse and spread out in Wyoming. However, the state, in particular Cheyenne, is situated near a fiber-optic superhighway as explained in this America Revealed video. There are nine telco providers in Wyoming, and over 80% of homes in the state have broadband access. Bruns said, "Even our team did not appreciate the number of fiber-optic cables passing through Wyoming."

That became important when Microsoft was deciding if Wyoming would be a good location for latency-sensitive data centers. Bruns mentioned that Microsoft executives told him the fiber-optic bandwidth and quality of signal at the Wyoming facility is the best they have seen.

In addition, more than one person interviewed mentioned that Wyoming's best asset might be not having a large population base. Residents have easy access to government officials and the reverse is true, so things get done.

Incentive programs

From the state to local communities, Wyoming offers multiple incentive programs for data-center operators. Some examples are:

  • Managed Data Center Cost Reduction Grant offers cities, counties, and joint­power boards incentives to provide financial opportunities and discounted services to companies building data centers in their communities.

  • Data Center Sales Tax Exemption: If companies building data centers in Wyoming meet certain requirements, sales tax on qualified computer equipment is exempt.

  • Data Center Infrastructure Grant: The state offers cities, towns, and counties assistance to build the needed infrastructure for data centers.

  • Data Center Permit Exemption: If a data­-center project exceeds a certain capital investment, the company is exempt from state siting permits.

For the latest Microsoft expansion, the state provided a $5 million grant for infrastructure build-out on the 120-acre parcel to be used for the facility.

Looking towards the future

Besides using current technology to build data centers, Microsoft has partnered with Wyoming, the University of Wyoming, and Fuel Cell Energy to build the first zero-carbon data center. Located near Cheyenne's Dry Creek Water Reclamation Facility, Microsoft's 200 KW test data center is powered by biogas-fed fuel cells. The biogas is reclaimed from the water­-treatment plant.

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