Microsoft backtracks on datacentre build

The fallout from Thursday's cost-cutting moves by Microsoft continues. On Friday, Microsoft announced it is delaying its plans for a massive datacentre to be built in Iowa, US.

It is an abrupt reversal for Microsoft, which announced its plans for Iowa just five months ago as part of its massive push into the datacentre business. By October, though, the software maker was already detailing plans to cut its datacentre spending by $300m. Now Microsoft is looking to cut things even further.

Microsoft's Mike Manos and Arne Josefsberg said in a blog posting on Friday: "We are still continuing construction of our facilities in Chicago and Dublin, and are planning to open them as customer demand warrants. But given the current economic climate we're going to do the right thing for our business and shareholders and revisit our plans on a quarter-by-quarter basis."

The best of silicon.com photos

1. Photos: Second Life gets down to business

2. Photos: Taking the wraps off Windows 7

3. Photos: Honda kick starts motorcycle safety tech

4. Minority Report: 10 Apple patents to watch

5. Photos: Cops use tech to point the finger of suspicion

Microsoft tried to put its best spin on the move, saying that long-term the cash crunch will help drive customers to turn to Microsoft rather than building out pricey datacentres themselves. Josefsberg and Manos also said Microsoft will find less expensive ways to have the capacity it needs to run Windows Live Hotmail, Windows Live Messenger, and all of Microsoft's other online services.

"We've been preparing for lean times for a while," the pair said. "This recession is the ideal backdrop to implement small changes that target big needs. Frugality drives innovation, and limited resources are just another forcing function to develop creative solutions to infrastructure needs. For our industry, this means more reasons to identify the small tweaks to products or operational approaches that can unlock big opportunities."

Original article: Microsoft delays plans for Iowa data center from CNET News.com