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Microsoft files for data center campus outside San Antonio

Microsoft files for data center campus outside San Antonio

  • 21.03.2025 09:57
  • datacenterdynamics.com
  • Keywords: AI

Microsoft is expanding its data center presence in Castroville, Texas, with plans for two new buildings (SAT89 and SAT90) at 2995 US HWY 90 W. The $765 million project runs from June 2025 to July 2027.

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Microsoft is expanding its data center operations in San Antonio, Texas, with a new $765 million project involving two buildings totaling 489,400 sq ft. This expansion underscores Microsoft's commitment to increasing its cloud infrastructure and market presence in the region.

Context

Analysis and Summary: Microsoft Data Center Expansion in Castroville, Texas

Key Facts and Data Points

  • Project Details:

    • Two single-story data center buildings (SAT89 and SAT90) at 2995 US HWY 90 W in Castroville.
    • Total project cost: $765 million.
    • Construction timeframe: June 2025 to July 2027.
    • Total floor area: 489,400 sq ft (45,500 sqm).

  • Design Firm: Engineering company WSP is listed as the design firm for the project.

  • Existing Presence:

    • Microsoft already operates multiple data centers in San Antonio, including locations at:
      • 3545 Wiseman Blvd
      • 15000 Lambda Drive
      • 3555 Westover Link
      • 5200 Rogers Road

  • Azure Regions:

    • Microsoft operates the South Central US Azure region in Texas, opened in 2008, with three availability zones.
    • A separate US Gov Texas Azure region was opened in 2017.

Market Trends and Business Insights

  • Cloud Infrastructure Growth: The expansion reflects the growing demand for hyperscale cloud infrastructure to support enterprise computing needs.
  • Strategic Location: Castroville, located 27 miles west of downtown San Antonio, offers a strategic location with access to reliable power, fiber connectivity, and a favorable regulatory environment.

Business Impact

  • Scale and Redundancy: The new campus will enhance Microsoft's ability to provide scalable cloud services and improve redundancy in the South Central US region.
  • Customer Appeal: Localized data centers can attract enterprise customers seeking low-latency services and regional availability.

Competitive Dynamics

  • Hyperscale Competition: This expansion underscores Microsoft's commitment to competing with hyperscale providers like Amazon Web Services (AWS) and Google Cloud, which are also investing in similar infrastructure.
  • Strategic Positioning: By expanding its footprint in Texas, Microsoft aims to strengthen its position as a leading cloud provider in the region.

Long-Term Effects

  • Regional Economic Impact: The project is expected to create jobs and stimulate local economic activity during construction and operation.
  • Infrastructure Development: The investment highlights the importance of data centers in driving long-term infrastructure development in rural areas like Castroville.

Regulatory Considerations

  • Permits and Compliance: Microsoft's filing with the Texas Department of Licensing and Regulation indicates adherence to state regulations, ensuring compliance with local building codes and environmental standards.

This expansion underscores Microsoft's strategic focus on scaling its cloud infrastructure to meet global demand while maintaining a competitive edge in key markets.