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Oregon's Data Center Industry Flourishes by Staff Statesman Journal, March 26, 2012

PORTLAND -- Construction plans by Apple and online retailer Amazon are among the indications that a relatively new industry in Oregon -- data centers -- is thriving.

The Oregonian reports Apple has begun work on a 10,000-square-foot server farm on bluffs overlooking Prineville.

Amazon has started work on a second large data center in Morrow County. More than a dozen other Oregon communities are trying to attract server farms, according to economic development officials.

The climate is favorable, in part, because of Oregon's relatively low energy costs. Data centers have large power needs to operate thousands of computers that store clients' photos, songs, movies, corporate data and other online information.

The state's tax laws are another attraction. Without a sales tax, data centers save substantially when they buy new computers. Also, under state law, cities and counties can create rural "enterprise zones" that exempt data center equipment from property taxes.

The first data center in the state was built by Google in 2006 at The Dalles. The company spent more than $1 billion outfitting the center.

Facebook last year opened its first company-owned server farm in Prineville, and Amazon opened one near Boardman.

Construction of a data center creates jobs, but the data centers themselves don't require a huge number of permanent employees. The computers inside need little human supervision. Facebook employs just 55 people to run its Prineville data center.

Apple's operation, built on 160 acres it purchased from Crook County, will be modest.

"It's just kind of a first phase that they've thrown together to get things started on the ground," Prineville city planner Josh Smith said.

"It's just a small, initial phase," Smith said. "I assume they'll build something larger."

It's across the highway from the 333,000 square-foot data center that Facebook opened last year. The company is at work on a matching building.

The Bonneville Power Administration's accelerated plans to upgrade Central Oregon's power supply will help the industry. The BPA is increasing capacity at its Ponderosa power substation by 400 megawatts. The upgrade originally was scheduled to be finished by summer 2013 but should be completed in January.

Port of Morrow officials said Amazon began construction of a second, 120,000-square-foot data center earlier this month.

The Port also hopes to attract business from hosting company Rackspace. Port officials said they are optimistic that the Texas company will approve the project before its option to buy land expires at the end of the month.