Data Center Construction for Competitive Advantage

Last week, Paul Kedrosky picked an interesting tidbit out of the coverage of Ray Ozzie’s recent talk at the Goldman Sachs Technology Investment Symposium:

In order to continue to seek advantage over Google in online services, Ozzie said that Microsoft will continue to invest in massive data centers, such as its $550 million center recently slated for construction in San Antonio, Texas.

We wrote about this last year on Radar, in an entry entitled Operations: The New Secret Sauce, picking up on Microsoft VP Debra Chrapaty’s comment that “in the future, being a developer on someone’s platform will mean being hosted on their infrastructure.”

Paul asks the further provocative question “How do you invest around data center construction?” That is, once we observe this trend, what are the implications in terms of new startup opportunities? Your thoughts welcome.

(Also of interest in Ray’s speech was the idea that one way that Microsoft intends to compete with Google is by going more heavily into vertical search areas like health — although from what I hear, Google has some big initiatives cooking in that area as well.)