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Microsoft Eyes Texas for $600M Data Center

Microsoft is reported to be searching sites in San Antonio and Austin for a 470,000 square foot, $600 million data center project.

Microsoft is exploring sites in Texas for a 470,000 square foot server farm that could cost as much as $600 million to build, according to local media reports. San Antonio and Austin are in the running for the massive facility, according to the San Antonio Express Times, which cited local real estate and economic development sources.

"People close to San Antonio's talks with Microsoft said its site-selection staff likes the area's inexpensive electrical power, work force and lack of exposure to natural disasters," the paper reported. Real estate firm Jones Lang LaSalle is said to be working on Microsoft's behalf and looking in the Westover Hills area of San Antonio.

Microsoft has asked the city and Bexar County for 10-year tax abatements for the planned 470,000-square-foot center, according to the two people familiar with negotiations. Austin is becoming a hot market for data centers, as it recently was selected as the site for two large Hewlett-Packard data centers.

Microsoft broke ground last week on a 75-acre data storage facility in Quincy, Washington. The software giant is scaling up its data center infrastructure as it moved to a "software as a service" model focused around delivering consumer and business services through web portals like Office Live.