Dive Brief:
- The popularity of cloud computing has resulted in about a 12% per year growth in the data center industry, Computer World reports.
- Some data centers are now pushing for tax breaks as a condition for moving into a state.
- Switch, a data center facilities firm, recently asked the Michigan state legislature for tax breaks to help it build a 2-million-square-foot data center costing $5 billion. The request has set off a political debate in that state.
Dive Insight:
Switch says if it doesn’t get what it wants, it may drop its plan to build in Michigan.
But Michigan data center operators, known together as the Michigan Data Center Alliance, want lawmakers to treat all of them fairly.
"Our alliance is not asking for tax breaks. We haven't needed them; we got very healthy growth," said Yan Ness, CEO of Online Tech in Ann Arbor and head of the data center alliance. "Heck, if the whole thing falls apart, and there is no tax break for us at all, and Switch goes somewhere else, well that's ok, too. We will just get back to running our businesses."
The group represents nine data center firms with 38 data centers in total and more than 1,000 employees.
The state said the tax break reductions could cut state revenue between $20 and $30 million a year.
On Tuesday, Michigan lawmakers approved tax breaks for sales and use taxes, but applied them to all of the state's data centers. The legislation is now heading to the governor.
Switch says its proposed data center near Grand Rapids will create 1,000 jobs over 10 years. The company’s customers include eBay, MGM Resorts, DreamWorks, Zappos, Box, Intuit, among others.
