Citing an unfavorable change in tax laws, Microsoft is moving its Windows Azure cloud from a data center in Washington state to one in Texas. It's an interesting new twist in the cloud computing market-moving a cloud across state lines in response to the regulatory climate.In a blog post on its Windows Azure site on Tuesday, Microsoft revealed that it's moving Azure-based apps from its Northwest region, citing "a change in local tax laws." According to an article on DataCenterKnowledge.com, Microsoft faces a 7.9% tax on new data center gear, following a period in which it apparently paid no such tax. In February, SeattlePI.com reported that a tax exemption could be worth more than $1 billion to Microsoft and other data center operators in Washington.

Michael Manos, the former GM of Microsoft data center services and now senior VP with data center specialist Digital Realty Trust, suggests that we're witnessing the beginning of "a cat and mouse game that will last for some time on a global basis." In a blog post, Manos provides examples of how government regulation can affect data center location and cost, and he makes the point that laws and regulations can change after a data center gets built. What then?

The answer is to move the data center or, in the case of Microsoft, to move the services that represent the data center's biggest area of growth, its Windows Azure cloud services. (Azure is due for availability in November.) "The 'cloud' will ultimately need to be mobile in its design," Manos writes.

Moving the data center itself would be an extreme measure, though within the realm of possibility. While at Microsoft, Manos helped conceive a blueprint for modular data centers that can be assembled like Lego blocks and, presumably, disassembled and reassembled.

A more feasible approach, and the one that Microsoft appears to be taking, is to move the cloud computing software layer and associated data, while leaving the physical servers in place. Manos uses the metaphor of the data center as a "folder." If data center operators were able to drag and drop clouds from one folder (data center) to another, it would make them less vulnerable to changing conditions, including laws, taxes, customer demographics, even wars and natural disasters.

Cloud architects and cloud users have already begun to think in terms of geographic location, as evidenced by Amazon Web Services' "regions" and "availability zones." And Microsoft gives early adopters of Azure a degree of control over where their apps and data are stored. Given Microsoft's impending cloud shift, Azure users are being instructed to disable the "USA-Northwest" option for any new applications they build. In migrating Azure to a different data center, Microsoft is taking the concept of the movable cloud to the next level.

Want to see what a cloud data center looks like? Here's our image gallery of Microsoft's San Antonio data center, the new home of the Azure cloud. The photos were taken by InformationWeek's Nick Hoover last year on a walk-through of the facility.

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