Cooling data centers with seawater is not new, Google has been doing it since at least 2011. There are many ways to mitigate the corrosive effects on the equipment. "For instance, Interxion uses materials like Cunifer and titanium, which will last approximately 10 years in seawater." [1]

There also are many tried and true ways to manage the heated water so that it is safe for the environment [1, 2].

"We pump that seawater through cooling modules - which are direct water to water heat exchange modules - and then the water is gravity fed from the cooling modules back out to a temporary building, which serves the purpose of mixing incoming seawater with outgoing return water, so when we return the water to the Gulf it is at a temperature more similar to the incoming water." [2].

I'm sure Microsoft was aware of all this before publishing their report. Good on them for thinking creatively.

[1]: http://www.datacenterjournal.com/industry-perspective-seawat...

[2]: http://www.datacenterdynamics.com/power-cooling/googles-finl...