Microsoft Steps Up Cloud Expansion Plans

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Serious Server Density: Packed racks of servers in an IT-PAC at the new Microsoft data center in Quincy, Washington (Photo: Microsoft Corp.)

Microsoft will invest an additional $150 million to expand its new data center in southern Virginia, continuing a series of expansion announcements that hint at a dramatic scaling up of Microsoft's cloud computing capacity. Microsoft will build a second data center facility and add 21 megawatts of power capacity at its new location in Boydton, Virginia, even as it is still completing the $499 million first phase of the project.

With the Virginia project, Microsoft continues to step up its data center construction program as it builds future capacity for its battle with Google and other leading players in cloud computing. The announcement comes on the heels of expansion initiatives of Microsoft data center projects in West Des Moines, Iowa and Dublin, Ireland. Microsoft has not confirmed either expansion, but is pursuing approvals and incentives from local officials. As in Virginia, Microsoft is looking to expand in Iowa even before it completes and opens the first phase of its project.

Moving Quickly To Add Capacity

Microsoft's data centers are a key component in a major business shift at the company, which is expanding beyond its traditional desktop software business to offer cloud computing services, in which Microsoft's applications will be hosted in its data centers and delivered over the Internet. Major Internet companies like Google, Yahoo and Facebook typically build multiple facilities at a single location, but usually deploy one phase at a time. Microsoft's recent moves to expand in multiple sites suggests it will need more data center space sooner rather than later.

"Microsoft is excited to once again expand its cloud infrastructure and services capacities in Boydton," said Dayne Sampson, corporate vice president, Microsoft's Global Foundation Services group. "We greatly appreciate the work that Virginia's Governor and local officials have done to make the Commonwealth a great place for Microsoft to continue to invest in to enable the best possible delivery of services to our current and future customers."

Big Investment, Additional 10 Jobs

The expansion will add 10 jobs, bringing the total expected employment in Boydton to 60 positions. Data centers properties bring lots of investment, but modest numbers of new jobs, given the automated nature of their operations. Nonetheless, local officials said they were thrilled with Microsoft's decision.

"In 2010 I announced Microsoft's plans to establish its most advanced data center in Mecklenburg County, which represented the largest economic investment in Southern Virginia history," said Virginia Governor Bob McDonnell. "Just one year later, the company is making another significant investment to expand the operation site and add electric power capacity. Securing this state-of-the-art data center was an important win for the Commonwealth, and additional growth will further establish Virginia as an Information Technology leader."

"Considering this economic climate the new announcement by Microsoft is astounding," said Glenn Barbour, Chairman of the Mecklenburg County Board of Supervisors.

Modular Deployment at Scale

Microsoft’s new facility will feature the use of its container-based design known as an IT-PAC (short for Pre-Assembled Component). 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. 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.

"The company's innovative data center design increases efficiency of operations, and this expansion will enhance the high-tech capabilities already in place as Microsoft continues to grow its operation," said Jim Cheng, Virginia Secretary of Commerce and Trade.

The Boydton site has strong fiber connectivity from existing routes supporting a government data center in the region. The fiber optic network of the Mid-Atlantic Broadband Cooperative (MBC) was described as a”key component” in Microsoft’s decision to locate in Virginia. The 175-acre site features a 40-acre graded pad. The site is served by Dominion Virginia Power.

Microsoft has been operating a pair of data centers in northern Virginia, where it has been one of the largest tenants in data centers operated by DuPont Fabros Technology (DFT). The company recently indicated it will renew its leases for those sites.