SAN ANTONIO EXPRESS NEWS                                                    By L.A. LOREK 

SAN ANTONIO, TEXAS July 31, 2007 - Under mostly sunny skies Monday, a Microsoft Corp. executive conjured up the vision of a cloud to describe how the company's $550 million data center may lead to a $1 billion San Antonio investment.

The data center is a virtual cloud consisting of tens of thousands of computer servers that will contain the digital data for the world's largest software company.  The 470,000 square-foot structure that Turner Construction Co. began building in April will contain Microsoft's digital brains.  

And that may be just the beginning.

Microsoft has another identical building planned for San Antonio, said Debra Chrapaty, Microsoft's corporate vice president for global foundation services.  The next phase could bring the software giant's investment in San Antonio closer to $1billion.

"We're building the cloud," Chrapaty said.  "The cloud is not the cloud in the sky, it's what we're about to break ground on in San Antonio."

The new building on a 44-acre site in Westover Hills will serve up e-mail accounts, Web pages, instant messages, photos, videos, software programs and search information to millions of Internet surfers worldwide.  Microsoft has more than 280 million Hotmail customers, and its computer systems handle 8 billion message transactions per day, Chrapaty said.

Chrapaty, who wore a white shirt, khaki pants and cowboy boots, surveyed the job site with the rest of the Microsoft officials in a white stretch Hummer.  She also operated the milling machine, which grinds up rock and dirt.  Construction is well under way at the site, and the center is expected to go live by December 2008, Chrapaty said.

The San Antonio data center will look like a mirror copy of Microsoft's 470,000-square-foot data center in Quincy, Wash.  That site went live a few months ago.

"We've been anticipating this day for months now," said John Montford, chairman of the San Antonio Economic Development Foundation.  "In addition to all the construction work, this Microsoft data center is expected to employ 75 data center workers in some very good jobs."

It took more than two years to bring Microsoft's data center to San Antonio, but the effort paid off, said Bexar County Judge Nelson Wolff.  City and county officials, the San Antonio Economic Development Foundation, CPS Energy and the San Antonio Water System all worked together to bring the project here, he said.  In San Antonio, Microsoft will receive $32.6 million in local incentives over 10 years.

Six City Council members turned out for the event, along with more than 100 officials and businesspeople.

"From the city of San Antonio, thank you for a $600 million investment in San Antonio, adding to the $6 billion in technology going on here," said Kevin Wolff, city councilman and mayor pro tem.

Mayor Phil Hardberger, who was unable to attend the event because of a delayed flight, said in a news release, "Microsoft's investment already has raised the profile of San Antonio as a place for technology companies to do business."

Already, San Antonio is forming a cluster of data center projects.  Since Microsoft announced its plans in January, Christus Health, the National Security Agency and Stream Realty all have announced new data center projects.  Lowe's Corp. also is building one in Westover Hills.

Charles "Marty" Wender, the developer of Westover Hills, is working with 15 other companies looking at sites for similar projects in San Antonio.

"Microsoft is like the gold standard," Wender said. "Getting endorsed by a company like Microsoft is huge."

CPS Energy plans to build a substation near the Microsoft site.  Even with the addition of Microsoft, the utility has plenty of power left for other data center projects eyeing San Antonio, said Milton Lee, CPS Energy general manager and chief executive.

"We plan for customers all the time," Lee said.  "I'm looking at electric and gas systems 20 to 30 years out."

In addition to the power, Microsoft will use 500 acre-feet per year of recycled water, said David E. Chardavoyne, chief executive and president of SAWS.

"Recycled water is a low-cost environmentally proactive way to cool large buildings," he said.

Inexpensive power and access to water are two of the 30 criteria that Microsoft considered before choosing San Antonio, Chrapaty said.

"We spent a lot of time in Austin," Chrapaty said. "We're really excited to be able to add to the technical community in San Antonio."