) recently announced the expansion of its data center that lies
about seven miles west of Des Moines in Iowa.
The software maker will invest approximately $678 million for
the expansion. Microsoft opened its data center in Iowa in 2009
to support its cloud computing services platform, Windows Azure.
The expansion is expected to create 29 new jobs. Microsoft in
turn will be eligible to receive incentives of up to $20 million
in tax credits.
Windows Azure is Microsoft's cloud computing platform for
building, deploying and managing applications and services
through a global network of managed datacenters. Windows Azure
core offerings include Media Services, Mobile Services, Cloud
Services, Virtual Machines, Websites and Big Data. It competes
) cloud computing platform Amazon Web Services (AWS) and OpSource
Cloud Computing Services.
Investments in states like Iowa makes sense as they offer tax
incentives, low-cost power, cheap land and good weather
conditions. All these factors attract IT majors to make low cost
Recently in April,
) announced that it will open its fourth data center in Altoona,
) has also been present in Iowa since 2007 and invested more than
$1.0 billion in the state.
The need for data center expansion is rising due to the
growing demand for cloud computing and the ever-increasing needs
of Internet users. Market research firm, IDC predicts that the
cloud market will jump 130%, reaching $43.0 billion in 2016.
Further, Gartner predicts that around $677.0 billion would be
spent on cloud services within the 2013-2016 timeframe.
Microsoft, with its solid portfolio should be able to tap this
The company is expanding Windows Azure internationally and
investing in technology infrastructure to support rapid growth.
Microsoft remains one of the best positioned software vendors,
given the wide range of its products, emerging markets strength,
continued technology deployment at data centers and growth in
Currently, just like other PC makers, Microsoft is also
battling the slump in the PC market caused by the sluggish
economy. In addition, the popularity of smartphones and tablets
from Apple and Google have been cannibalizing its core PC market.
Therefore, it is important for the company to focus more on
emerging segments such as mobile hardware and the cloud.
Currently, Microsoft has a Zacks Rank #4 (Sell).
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