You Probably Missed the Other Way Microsoft Is Cutting Expenses

Reducing its workforce is only one way that Microsoft is saving money.

Jul 22, 2014 at 11:33AM


Source: Microsoft

The number getting the most attention is 18,000 -- the count of Microsoft (NASDAQ:MSFT) employees around the world who will soon be looking for a job thanks to new CEO, Satya Nadella, and his attempt to right a ship that had been led astray by previous CEOs Steve Ballmer and Bill Gates. What's getting much less attention is an alternate way in which the company is looking to control costs -- adopting renewable energy.

What's the deal?
Announcing  that it has entered into a 20-year power purchase agreement, or PPA, with EDF Renewable Energy, Microsoft will purchase wind-generated power from the Pilot Hill Wind Project, a 175 MW facility located about 60 miles south of Chicago. According to management, this is not only Microsoft's largest wind project, but it is "one of the biggest corporate wind purchases from a single facility." The purchased-power will more than supply the power needs of the company's Chicago data center.


Source: RES Americas

This is the second deal in which Microsoft has decided to use wind power to meet its energy needs. In 2013, Microsoft entered into a 20-year PPA with RES Americas to purchase 100% of the wind power generated at the 100 MW Keechi Wind project. Expected to be operational in 2015, the facility is powered by 55 Vestas (NASDAQOTH:VWDRY) V100 turbines.

Head in the cloud
Presumably, this won't be Microsoft's last renewable energy project as it increasingly moves toward more cloud-based solutions. Other companies have already moved in that direction. Apple (NASDAQ:AAPL), for instance, uses wind-generated electricity to help power its data center in Prineville, Oregon. Similarly, Apple's data center in Newark, California sources some of its energy needs from local wind power projects. These facilities are just two of many that are powered by renewable energy -- and more are to follow. Apple has set the ambitious goal of powering all of its facilities and retail stores by renewable energy.

Google (NASDAQ:GOOG) is another company using wind energy in order to power its massive data centers. Last year, Google entered into a 10-year PPA with wind farm developer, O2, regarding a soon-to-be-built, 72 MW facility in northern Sweden. Google will use the purchased-power to run its Finnish data center. In general, Google claims to have signed seven contracts for 1040 MW of wind energy -- just one step in its stated goal to power 100% of its operations with renewable energy.

A third company giving the thumbs-up to wind energy is Facebook (NASDAQ:FB). Although its target of sourcing 25% of its power from renewable energy sources by 2015 is less ambitious than Apple and Google, it is a significant show of support for solar and wind power nonetheless. Last November, the social network entered into an agreement with MidAmerican Energy. Facebook will purchase the wind-generated power from MidAmerican's 139 MW Wellsburg wind farm in Iowa to power a new data center in Altoona. Construction of the facility is under way, and it is expected to be operational by the end of the year. 

The Foolish takeaway
Microsoft's deal with EDF is just the most recent example validating the value that wind power offers companies that operate major data centers. This bodes will for turbine manufacturers, like Vestas, which will be called on to supply the equipment for future projects -- projects that will help companies like Apple and Google meet their targets of powering their facilities with 100% renewable energy.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Scott Levine has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, and Google (C shares). The Motley Fool owns shares of Apple, Facebook, Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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