As Iowa Leads, Midwest Plays Growing Role in Cloud Geography

Aug. 30, 2017
The center of the country is proving to be the ideal place to add data center capacity. Apple, Facebook, Google, Amazon and Microsoft are investing $11 billion in cloud campuses across Iowa, Ohio and Nebraska.

No one wants to wait for their music or video. That’s why the location of data centers is critical to delivering online services with low latency. As Internet titans seek to distribute large files to support videos, gaming and virtual reality, the center of the country is proving to be the ideal place to add data center capacity.

This trend is spurring a data center building boom, pumping billions of dollars into towns across America’s heartland. Five large cloud companies – Apple, Google, Amazon, Microsoft and Facebook – are investing more than $11 billion to build massive server farms across Iowa, Ohio and Nebraska.

In the latest of these projects, Apple has announced plans to invest $1.3 billion in a new data center campus in Waukee, Iowa. The company is expected to start construction of two data centers early next year, bringing the first building online in 2020.

“Our new data center in Iowa will help serve millions of people across North America who use Siri, iMessage, Apple Music and other Apple services,” said Apple CEO Tim Cook. “We’re always looking at ways to deliver even better experiences for our customers.”

During the first phase of Internet growth, data centers were built primarily in technology hubs near major cities on the coasts, especially Northern Virginia, New York and Silicon Valley. These markets remain healthy, but site selection with the emergence of the hyperscale data center – massive buildings optimized to house tens of thousands of web servers and data storage devices. Data center development shifted to areas with an abundance of cheap land and power, including rural locations.

No state has benefited more from this trend than Iowa, which is home to huge cloud campuses for Google, Microsoft, Facebook and now Apple.

“Apple’s significant investment and commitment to grow in Iowa is a clear vote of confidence in our state,” said Iowa Gov. Kim Reynolds. “This announcement further solidifies Iowa as a hub where innovation and technology flourish and demonstrates this is a place where world-class companies can thrive.”

A Convergence of Clouds

Placing data centers in the center of the country makes it easier to distribute content to major markets like Chicago and Dallas, reducing lag and buffering for streaming media like Netflix movies or Facebook videos. It also allows for data to move quickly to either coast, which can be important in application development.

As an example, Amazon Web Services customers using the company’s Ohio data centers experience just 12 milliseconds of round-trip latency when sending data to the cluster of AWS facilities in Northern Virginia. This makes it easier for customers to replicate data across the two regions, which allows for automatic failover when web applications experience performance problems or outages.

Google kicked off the Iowa data center boom with its 2007 announcement of a new facility in Council Bluffs, which over the last decade has grown into the company’s largest cloud campus, with well over 1 million square feet of data center space deployed.

The trend has accelerated in the past two years with a flurry of mega-campuses arriving in the region.

  • Microsoft announced plans in June 2016 to invest up to $2 billion in a new data center in West Des Moines, where it already operates two huge data center campuses. Local officials said “Project Osmium” would boost Microsoft’s total investment in West Des Moines to nearly $3.5 billion.
  • In May Facebook broke ground on a 1 million square foot data center building in Altoona. It’s the fourth data center on the company’s cloud campus, and will boost its presence to more than 2.5 million square feet of space and $1.5 billion in investment.
  • Google continues to build out its campus in Council Bluffs, where it has begun building multi-story data centers to increase the data storage capacity of its existing real estate. The company expects to invest up to $2.5 billion in its Iowa cloud campus.

Data centers have emerged as attractive projects for economic development, serving as symbols of the digital economy. At least 26 states now offer economic incentives for data center projects, which include tax breaks on land, power and the purchase of servers, storage devices and power equipment like UPS systems and backup generators.

Why Cloud Campuses Love Iowa

The rapid growth of cloud computing has spurred a building boom for the major Internet platforms, as Google, Microsoft, Amazon and Facebook are all super-sizing their cloud campuses to add data center capacity.

Cloud campuses are where these companies concentrate massive amounts of computing power in multiple data center facilities. These data center hubs enable companies to rapidly add cloud capacity and electric power, creating economies of scale as more workloads migrate into these massive server farms.

Iowa has benefited from a confluence of factors that make it attractive to data centers, including its location, which provides low latency to deliver online services to the center of the country. The state has relatively low costs for land and utility power, and lower exposure to natural disasters than many areas of the nation, with low risk from hurricanes and earthquakes. Data center projects also benefit from incentive programs passed by the Iowa legislature in 2009.

Apple Joins the Data Center Party

The enormous scale of new cloud campuses can be seen in Apple plans to purchase a whopping 2,000 acres of land in Waukee. The first phase of the project will include two data center facilities that are expected to run entirely on renewable energy.

Procuring green energy has become a priority for cloud builders, who use enormous amounts of electricity as they consolidate enormous volumes of business activity inside their walls. In 2016, data center providers signed contracts for more than 1.2 gigawatts of renewable power, marking a dramatic turnaround from earlier headlines critiquing the industry’s dependence upon “dirty coal.”

An illustration of the front entrance of Apple’s planned data center in Waukee, Iowa. (Image: Apple)

Iowa state and local officials spent 20 months working with Apple to find a suitable location for the new data center facility. The Iowa Economic Development Authority (IEDA) worked with the Greater Des Moines Partnership and Waukee officials once the company’s project team narrowed its Iowa search to one site. Waukee supported the project with a local tax abatement and infrastructure improvements, while the IEDA Board approved tax incentives via the High Quality Jobs program for the more than $1.3 billion project that will create at least 50 jobs at a qualifying wage of at least $29.12 per hour. All told, the incentives added up to an estimated $207 million.

Apple will also contribute up to $100 million to a newly created Public Improvement Fund dedicated to Waukee community development and infrastructure. The fund will be managed by the City of Waukee and support the development of community projects like parks, libraries and recreational spaces, as well as infrastructure needs. The first project the fund will support is construction of the Waukee Youth Sports Campus featuring a greenhouse, playground, fishing pier and fields for high school and public sporting events.

Here’s a look at the development of Iowa as a data center market, and the presence for the major hyperscale players.


Google was the first cloud builder to arrive in Iowa, building its first data center in Council Bluffs in 2007. It soon acquired a larger plot of land on the outskirts of town for a larger cloud campus. Google has already invested $1.5 billion on infrastructure in Iowa, and has plans to spend an additional $1 billion building data centers in the state.

Joe Kava, Vice President for Data Center Operations at Google, says the company’s multi-building project in Council Bluffs “is the world’s largest data center campus. Each of these building pads is more than a third of a mile long, with multi-story data centers.”

Google has lots of land in Iowa. To boost its cloud capacity, Google is going vertical with its data center design, shifting from a single-story design to four-story data centers.

The new four-story data center at the Google campus in Council Bluffs, Iowa towers above the one and two-story data centers seen at left. (Photo: Google)


Microsoft’s newest Iowa data center, known as Project Osmium, will be built on 200 acres of land spanning Warren County and 40 acres in Madison County. Plans call for four phases of construction, with data centers between 256,000 and 583,200 square feet in size, for a total planned footprint of 1.7 million square feet.

Project Osmium is Microsoft’s third campus in the West Des Moines area. Why separate campuses, instead of one large campus? City officials say Microsoft is spreading out its risk out of concern about tornadoes, seeking to limit potential disaster damage from any single storm. The three sites are between five and seven miles apart.

As with Apple, the Microsoft project brings benefits for the local community. Project Osmium will include infrastructure upgrades including new  power lines, streets, water lines and sanitary sewer lines that will help accelerate the development of over 5,000 acres of land in northern Warren and Madison counties –  including 10 miles of new roadway.


Facebook’s project in Altoona has seen the most aggressive construction schedule of any of the company’s data center campuses. Just three years after announcing its plans for a server farm in Iowa, Facebook has completed two massive data centers and begun work on a third. Each building costs about $300 million to build and fill with servers and networking equipment, placing Facebook’s investment above $900 million.

Altoona was the first location where Facebook committed to a third data center, which is likely a reflection of Iowa’s favorable environment. Earlier this year it boosted that commitment with the announcement of a fourth building in Altoon, a massive 1 million square foot facility that will be the company’s largest data center yet.

Rows of blue-lit server cabinets inside one of Facebook’s data centers in Altoona, Iowa. (Photo: Facebook)

One of the factors that worked in Iowa’s favor was the availability of renewable wind energy. Facebook worked with Iowa utility MidAmerican Energy and wind farm developer RPM Access to fund the construction of a wind turbine project that would generate 138 megawatts of new wind energy capacity to the Iowa grid – enough to more than offset the power Facebook uses on its Altoona campus.

Amazon Web Services

Although it is the largest player in cloud computing, Amazon Web Services focused its operations on the East and West Coasts of the U.S., with a massive cluster of data centers in Northern Virginia (which may soon reach 1 gigawatt in capacity) and smaller operations in Oregon and Northern California.

That changed in 2016, when AWS opened a cloud region in central Ohio, with data centers in three towns: Hilliard, Dublin and New Albany. Amazon standardizes its data centers to house between 50,000 and 80,000 servers, according to company presentations. That consistent approach can seen in the Ohio projects, in which all the data centers are 150,000 square feet, – the same size as the company’s recent construction in Northern Virginia.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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