The Des Moines register has reported that Microsoft is investing nearly $700 million in a massive new data center in West Des Moines, Iowa. The Iowa Economic Development Authority Board has approved around $20 million in tax credits for the software company to locate its servers there.

Microsoft will spend $677.6 million to expand existing facilities in the Des Moines area. The company has now invested close to $1 billion in the Des Moines area. The new data center is will reportedly be used to power Microsoft’s Xbox Live and Office 365 server-side features. In particular, Microsoft is stating that the new servers will provide “cloud” services to its customers.

During Microsoft’s recent announcement of its upcoming Xbox One video game console, the company stated that it has increased the scope of its Xbox LIVE subscription service, and now has over 300,000 servers backing up its system. Microsoft is also promising “cloud computing” that video game developers can use to shore-up the Xbox One’s computing power, though many gamers are, with good reason, skeptical of such claims.

Similarly, Microsoft just recently released a version of Microsoft Office for iOS platforms such as the iPhone. The app requires a subscription to Microsoft’s Office 365 service, which the company brands as “your complet Office in the cloud.”

The Midwestern U.S., with lower utility costs and the incentive of tax breaks, is quickly becoming the place for technology companies to invest in server farms. Companies such as Facebook and Google have poured billions into states such as Iowa and Nebraska in recent years.

(Via the Des Moines Register)