Google is not the only company building a data center near the Columbia River

* Microsoft buys tracts of land along the Columbia River

Recent articles have speculated about the purpose of Google's new data center on the banks of the Columbia River. From my perspective, the more interesting news was announced during a keynote address at last month's Microsoft TechEd conference that passed by with little or no comment.

Microsoft CTO Ray Ozzie, Corporate Vice President Chris Capossela and Senior Vice President Bob Mulgia all spoke at that event. During the course of one evening, one of the speakers mentioned the fact that both Microsoft and Yahoo have purchased extensive tracts of land along the Columbia River, but did not elaborate on why. Follow-up conversations with other Microsoft executives later in the week confirmed that this was indeed the case and that the major reasons for the purchase are cheap land (at least cheaper than Seattle, which doesn't take much) and cheap power.

Subsequent research shows that this is a compelling case indeed. Big data centers consume tremendous amounts of power - comparable to the requirements of some cities - and with the rise in energy prices, this continues to be an increasing concern. The Columbia and Snake River basins are home to more than 15 hydroelectric dams that produce cheap, clean power. Corporations that locate data centers there get a "twofer" - cheap power, as well as ecological correctness.

Reports are - and this was confirmed at TechEd - that Microsoft will be paying less than 2 cents per kilowatt hour (kwh), about 25% of the current national average of around 8 cents per kwh. Estimates are that an intended facility at Quincy, Wash., will consume around 50 megawatts of electricity. Do the math.

What is fascinating is to look beyond the facts to the unprecedented opportunities this opens up to Microsoft, as well as to the changes it can potentially bring to the industry. It certainly positions Microsoft for expansion of its own corporate data center but how many companies really need "tracts" of land for their data center? The bigger picture is services. One theory is that Microsoft is positioning for a huge services expansion, and this is underlined by the recent purchase of Softricity.

Softricity's virtualization product is designed to decouple users from specific devices. Softricity's technology is user based, not machine based. It provides the capability for a company to clone multiple generic PC images and, when a user signs on, to provision his or her personal data immediately, transparent to the user. Softricity's goal is to "make software as easy to use as electricity".

Let's take this one step further and postulate a new licensing model, where end users, not just corporations, can take advantage of this capability. So instead of struggling with the multiple headaches end users currently have to deal with - installing new software, virus-proofing and troubleshooting when something goes wrong - they can simply connect to Microsoft's big services center in Quincy. Presto - instant headache relief.

Taken together, these two announcements could introduce significant changes to the industry and to life as the average consumer knows it. Hackers beware - a new era of unprecedented end-user security might be on the horizon, and Microsoft just might be leading the charge.

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Copyright © 2006 IDG Communications, Inc.