There was a lot of speculation as to which company was the mysterious company behind the $700 million ‘Project Mountain’ data center in Des Moines, Iowa. With many pegging it an Amazon or Apple data center, ‘Project Mountain’ in fact belongs to Microsoft. The aforementioned Microsoft is plowing $700 million into a data center that will power Xbox One and Office 365.

According to state documents, Microsoft’s investment will total a more accurate $677.6 million, and comes on the heels of Facebook’s announcement two months ago that it would invest $300 million in an Altoona data center. (The investment is expected to grow to $1 billion over six years.) The Iowa Economic Development Authority Board approved today $20 million in tax credits for Microsoft. Microsoft’s ‘Project Mountain’ is all about powering Xbox One and Office 365.

I’d say the Microsoft cloud just got a significant jolt of lightning. <#rimshot>

The goal of the ‘Project Mountain’ data center, according to Christian Belady, Microsoft’s GM of Data Center Services: “Supporting the growing demand for Microsoft’s cloud services.” This highlights the importance of online or “up-time” and servicing for Xbox One and Office 365. Which is good, because Microsoft has boasted that the Xbox One is as powerful as 10 Xbox 360’s.

Microsoft has come under heat recently with the Xbox One announcement too. Amidst the war of the consoles, talk about bad timing. Immediately after announcing the Xbox One, Microsoft was hit square in the mouth over its always connected requirement and share game policies fiasco. Microsoft was forced to surrender and smartly waved the white flag.

The Iowa data center points to Microsoft’s continued push to the cloud and supporting it in both gaming and work. The cloud app model for Office 365 is a very interesting mobile play that I think should be watched closely. As far as gaming, at E3 2013 Microsoft showed its hand of being all about cloud gaming. The Xbox One is cuddling up to the cloud, and rightfully so because Xbox One’s performance can be drastically improved because of the cloud.

So here are your takeaways: Microsoft is investing in the cloud. XBox One and Office 365 both are cloud-supported and should conceivably be better products because of it. Look for more news from Microsoft in the cloud storage space in 2013…call it a hunch.