This morning I was reading about state incentives for huge data centers and how those incentive deals go sour at times. I’m going to take a post away from my tech theme and talk a bit about the politics of data centers.
I think it’s true, as the other article says, that states are engaged in a tax incentive arms race for massive data center projects, almost as much for the news buzz surrounding names like Google, Yahoo, Apple, etc. Other than the political bump, what do these facilities really gain the states they’re in? Automation has largely reduced the manpower required to operate these huge facilities (reference the news about Microsoft’s container data center only requiring 4 people to place a 2000 server container in service). Do these data centers actually generate a significant number of jobs past the short term jump during construction?
And what about the long term tax revenues from these data centers? When Washington state attempted to sales tax services provided on Microsoft’s Azure in a WA based data center, Microsoft simply relocated all those services to a data center in a more tax friendly state.
Meanwhile, small locally owned and operated companies get no benefits, attention, or even acknowledgment of existence. Smaller operations are the ones most likely to generate jobs in the community, pump money back into the community, and show any degree of loyalty to the community. Small operators are also the more likely ones to drive reuse of large inventories of former industrial floor space, such as the massive former textile mills that dot the New England landscape. The presence of a high tech operation such as a data center improves the attractiveness of any building to other high tech operations. So, why doesn’t anyone except the big boys make it onto the radar?
I think, from the perspective of my state (Maine), economic development agencies simply don’t get tech. During my years of operating an ISP and CLEC, I said more than once that the economic development people would rather open a pizza shop down the street than promote and help an up and coming local high tech business. The allure of having a high tech data center facility that might make a town more attractive to other high tech business isn’t there if it doesn’t have the name Google attached to it. I’ve also run into the “you’re too small to possibly be doing anything worthwhile” attitude too. If it’s not huge, it’s worthless.
Political and economic people may not know much about tech but they sure do know about publicity. Attach the Google or Microsoft names to it, build it huge (500,000 sq ft!), and attach all the buzz terms to it that you can (Green! Container!) and you suddenly have massive automatic credibility and a publicity bandwagon that everyone wants on to. For the small operation, it’s like being steamrollered.
So what is the answer to this? A relentless publicity campaign. Make sure you keep doing innovative and leading edge things and that you broadcast that far and wide. Stay on the “buzz bubble” and make sure you have the attention of the decision makers. Promote, promote, promote.
And don’t ever slack off because you know the steamroller is coming.
Vern, SwiftWater Telecom