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Boydton Journal

Cloud Computing Brings Sprawling Centers, but Few Jobs, to Small Towns

The Microsoft data center in Boydton, Va. The company has cleared a square mile of land for the project.Credit...Chet Strange for The New York Times

BOYDTON, Va. — A giant Microsoft facility just outside this very small town hides behind a quarter-mile berm and a guard house, across the highway from the rubble of a demolished prison.

Behind the berm, six unmarked hangars each hold tens of thousands of computer servers. Microsoft has cleared enough scrub trees and vines for at least 15 of these buildings, and six more are already under construction.

One thing there isn’t much of at this Microsoft complex, one single computer data center, is long-term work. Microsoft says it might have “several dozen” employees in a place like this. They are mostly elite computer workers who tend not to come from Boydton, which lost a lot of good jobs when nearby factories closed and the prison shut down.

So it is in a number of small towns across the country, as technology giants like Amazon, Google and Microsoft race to build networks of unprecedented size to provide services over the internet, a technology trend known as cloud computing. Local people, along with many economists and officials, often think these data centers are a key to an industrial revival. But the reality is less impressive.

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Boydton, near the North Carolina border, has a population of 430. A nearby textile plant shut down in 2002; a prison closed in 2012.Credit...Chet Strange for The New York Times

“I’ve worked on a lot of nuclear power plants, and these things are a lot bigger than that,” said E. W. Gregory, the head of the local electrical workers’ union. But “the first thing they put in was a guard shack and a fence. I’ve filled rooms with people looking for entry-level work. None of it lasts.”

The companies come to places like Boydton for basics like land, water and electricity. Even with low local wages, people are a high-cost item. As small as the staffs at these mammoth facilities are, companies say, perhaps a third of the company jobs will eventually be filled by robots.

Google started building in eastern Oregon to be near cheap hydroelectric power on the Columbia River, and most recently it has focused on Iowa, Alabama and Tennessee. Microsoft has a center in Wyoming, and it bought a nine-hole golf course as part of a complex near West Des Moines, Iowa. Amazon recently built similar giant facilities on the outer reaches of Columbus, Ohio, and Dulles, Va.

“A lot of this stuff is put in rural parts of the country that used to be part of a manufacturing economy” that has gone overseas, said Bill Coughran, a partner at the venture investment firm Sequoia Capital who ran much of Google’s big engineering for eight years. “Textiles and furniture created a big power grid in the south. Then those jobs went away.”

That’s been the story for Boydton, population 430, in the middle of tobacco country a few miles from the North Carolina border. The prison across from the Microsoft center closed in 2012. A nearby Burlington Industries textile plant that employed more than 2,000 shut in 2002. It was razed in 2012.

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E.W. Gregory, the head of the local electrical workers’ union, has not had much success finding long-term positions at the data center for his workers.Credit...Chet Strange for The New York Times

In Clarksville, the next town over, a Russell Stover candy factory closed in 2001, taking 700 jobs. Now the building is a data center for the Department of Homeland Security, operated by a small crew from Hewlett Packard Enterprise.

The South Virginia tobacco economy collapsed as Americans cut back on smoking. But in 1999, Virginia used some of the $4.1 billion it received in a settlement with cigarette makers to build high-speed fiber-optic lines throughout the region.

The broadband drew Microsoft, along with some financial perks. Mecklenburg County, which received $2.1 million from the state for the project, has given Microsoft 350 acres and offset personal property taxes by 82.5 percent, according to Wayne Carter, the county administrator.

Initially, Apple, which is building a big cloud center for consumers’ photos and music, wanted the Boydton site, but it went across the border to North Carolina, which promised tax breaks on its data center equipment. Not to be outdone, Virginia passed laws in 2009 and 2010 that exempted sales taxes on things like data center computer servers, software, power generators and chillers to cool all that equipment.

“We’ve had six years of construction work,” said Mr. Carter. That has helped the county, he said, because even temporary workers rent houses, stay in hotels and eat in local restaurants.

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The Microsoft center is across the highway from the former prison site.Credit...Joe Noah

Microsoft did not dispute reports that it would spend $1.1 billion on the Boydton data center, and said that “on average, data centers employ tens to several dozen people,” in a mixture of corporate and contracted positions. It declined to let a reporter tour the site.

“They talked about 100 jobs, but it’s a slow process,” said Thomas C. Coleman III, the mayor of Boydton. So far, he says, the biggest impact “has been a couple of lunch tables at the Triangle gas station.”

He understates matters, but not by much. Mr. Gregory, the electrician, said his union had hundreds of applicants for work digging ditches and laying pipe, starting at $10.88 an hour. Wiring paid $28.59. Both jobs tended to last about six months, he said, with lots of attrition for the hard outdoor labor.

Working as a security guard or as someone testing the wires inside the data center offers better money, but there are not many positions. Microsoft prefers to fly in its own specialists for some work, and it doesn’t like hiring people who have worked in other big companies’ cloud-computing centers, Mr. Gregory said. (Microsoft said it did not exclude candidates based on previous experience.)

“We can provide a place to live, but all those contractors will move on to the next town where they’re building,” Mr. Coleman said. “You don’t know what you can count on.”

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Roberta Benjamin at the Apothecary Cafe in the Boydton Pharmacy. Construction workers on the data centers rent houses and eat in local restaurants, but the economic boost is temporary.Credit...Chet Strange for The New York Times

The big cloud networks are immensely profitable for the few companies who can operate these global systems. The biggest three cloud companies estimate that the global market in business computing is worth $1 trillion or more, and they are rushing to expand globally. In interviews, all said they spend more than $2 billion annually on this.

“It’s phenomenal how rapidly they are growing,” said Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology who has written extensively on the impact of new technologies. “It is the key enabler of all kinds of technology advances, starting with the things companies do now, but lots cheaper, including outsourcing tech jobs.”

In a recent article, Mr. Brynjolfsson noted a report by the United States Council of Economic Advisers that said more than 80 percent of jobs paying $20 an hour or less could be automated. The report urged sweeping policy changes, like ending some licensing regulations for careers like hairdressing, or wage subsidies for low-paid workers, to adapt to the new economic infrastructure. For towns like Boydton, he said, “people are going to have to move to new places.”

That is hard to imagine in places where local roots go so deep. Conversations here usually start with people explaining where they are from, and what their families did here for generations. “Boydton is the quintessential quaint courthouse town,” said Leigh Lambert, the town librarian. “People from here love it. It feels like it’s always with you.”

Ms. Lambert grew up nearby, tried New York, and returned to work next to the court, which is adorned with a statue of a Confederate soldier. Microsoft initially came to a couple of town meetings, and it seemed to offer a way Boydton could come back. “Now they’re off by themselves,” she said. “We hear they have a really nice Starbucks machine.”

A version of this article appears in print on  , Section B, Page 1 of the New York edition with the headline: A Big Business With Few Jobs. Order Reprints | Today’s Paper | Subscribe

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