Report: N.C. Wooing Apple For $1 Billion Data Center

North Carolina is reportedly dangling a multimillion-dollar carrot to convince Apple to build a massive data center in one of the country's most unemployment-ravaged areas.

According to a recent Associated Press report, which quoted sources close to the matter, the North Carolina government is seeking to alter state corporate income tax structure to give tax breaks to companies that have a significant amount of payroll in the state but don't have a corresponding amount of sales.

Apple would qualify for up to $46 million in tax breaks over the next decade but would have to invest $1 billion in the data center project during the period and build the facility in one of two counties that have been hardest hit by the recession, the AP said.

An Apple spokesperson declined to comment on the report.

Apple has had a rough transition to cloud computing and is flush with cash, so building more data centers would be a logical move. Last July's launch of MobileMe, the subscription-based, cloud-based data synchronization service Apple billed as "Exchange for the rest of us," was a disaster of logistical sluggishness and dashed user expectations.

Apple launched the iPhone 3G at the same time, and the ensuing flood of traffic swamped its infrastructure and forced tens of thousands of customers to wait through phone activation delays via its iTunes store. Apple has since worked out the kinks in MobileMe, but it'll take some time for the lingering bad memories to fade.

Given the fast-growing popularity of iTunes and the App Store, Apple is going to require significant data center resources in the future, so it makes sense for the company to consider massive data centers on par with what Google and Microsoft are building, said Michael Oh, founder and president of Tech Superpowers, a Boston-based Apple reseller.

Apple has also been weaving cloud functionality into its iWork productivity suite and earlier this year launched a public beta of iWork.com, which enables users to share documents and projects online through a Web browser.

While iWork.com is still primitive compared to Google Docs, it's an example of how Apple is leveraging the interaction of cloud and desktop computing, and that's an integration direction the company will continue to expand on as it builds out its data center infrastructure, Oh predicted.