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By Mel Duvall
Intuit, a tax and financial software company, on Thursday officially opened its state-of-the-art $200 million data center in Quincy, a city in central Washington state. The facility will eventually replace 27 data centers the company operates worldwide, along with a backup center yet to be built.
The opening is a shot of good news for Quincy, which has become the center of a dispute between technology companies who would like to build data centers in the region and the state government that passed a controversial tax change.
Microsoft caused an uproar last week when it began sending notices to customers saying that it plans to shift applications hosted on its Windows Azure cloud computing service from its existing data center in Quincy to another in San Antonio, Texas. Microsoft attributed the move to a change in tax policies that will exclude data centers from a sales tax break for manufacturers.
Prior to the tax change, Quincy had become a major destination for companies looking to build the latest generation of data centers. The region has relatively inexpensive land and an abundant source of cheap hydro-generated electricity from the nearby Columbia River. It is primarily a fruit-growing region, but with its proximity to the technology hub of Seattle, it sees a bright future in providing technology infrastructure.
Yahoo also operates a major data center in the region. And earlier this year, Sabey, a Seattle-based developer, announced plans to build a 525,000 square-foot facility in Quincy.
Mike Manos, who used to run Microsoft's data center operations in Quincy, says the tax dispute is a sign of things to come. While the facilities provide high-paying jobs, the number of jobs is relatively small. Despite its size, the Intuit center, for example, will only employ about 30 people. And data centers are seen by many as power hungry, providing little return to the communities where they are based -- and placing huge demands on local infrastructures.
"These decisions all have to do with state-level taxes and their potential impact on upfront capital costs or long-term operating costs of the cloud," Manos, who is now an executive with Digital Realty Trust, said in a recent blog about Microsoft's decision. "You are essentially seeing the beginning of a cat-and-mouse game that will last for some time on a global basis."
Manos has worked on site selections for three large data center installations. "States and governments are currently using their blunt, imprecise instruments of rule (regulations and taxes) to try to regulate something that they do not yet understand but know they need to play a part of," he said.
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