North Carolina Offers Incentives for Apple Data Center

[qi:037] Apple (s aapl) yesterday came a step closer to building a $1 billion data center in North Carolina. The state’s legislature on Tuesday approved a $46 million incentive package tailored to attract a data center project from an unknown company that several news outlets have identified as Apple. The state’s House will cast a final vote on the bill today before sending the legislation to the governor. Now, I have some questions about incentives for data center projects, but my real question is, what is Apple doing building a billion-dollar data center?

That’s a lot of raised floor and servers. Apple certainly needs hardware to operate its iTunes store, its MobileMe cloud and other web-based services, but does it need quite so much? Given the degree to which Apple likes to control all aspects of its products, and the rise of a variety of cloud services, perhaps it’s planning space to provide better online services. Maybe the $1 billion will buy Apple the infrastructure for an entertainment cloud to deliver everything from music to movies, along with a productivity cloud for applications and stored contacts and files. Om has pointed out that Apple needs to focus on its infrastructure if it wants to compete, so maybe this data center is Apple’s $1 billion bet on the cloud.