Apple said to be building $1 billion server farm

This is not a bil in cash; they're most likely adding up the retail price of their own hardware sitting in warehouses and other stuff they can "license" to themselves for free.

If we say the cash cost to them is about half of that, I think 500 mil can be recouped selling their services to about 50 or so large corporations and governments.

Apple has cash to burn and it needs another business leg to hedge against its consumer offerings. 500 mil in R&D and insurance sounds about right. We will have to wait to hear what they tell their shareholders, in any event.

Way to ruin my elaborate disinformation ploy. :-)

While they're spending a billion dollars, I wouldn't be surprised if they developed some custom hardware.

Legally, Apple only allows you to virtualize OSX Server, and it has to be on Apple-branded hardware. I suppose the main hurtle for MacMiniColo customers would be affording the license ($499 minimum). That said, MediaTemple is experimenting with this exact setup:

http://mediatemple.net/labs/xv/

That is actually an interesting thing to ponder (what would happen if there were no direct federal taxes). Instead, taxes would be funneled through local or state governments, which would be responsible for contributing some amount of that to the federal government. Local governments could then tweak who, what and how much they tax in order to attract business. Policy might also become less homogeneous across cities and states because the federal government would have less money to hold over the heads of local policy makers. But maybe not...just thinking out loud here...