Originally posted to Data Center Frontier by Rich Miller.
Microsoft has bought 65 acres of land in northern San Jose, and plans to build a data center campus on the property, the company confirmed Friday. Microsoft’s plans mark a departure from several prevailing trends in the Silicon Valley data center market, where most of the action has focused in Santa Clara, and hyperscale players have historically leased space from third-party providers, rather than building their own facilities.
The deal demonstrates that cloud platforms continue to covet data center capacity in the largest U.S. markets, even as they build huge cloud campuses in rural and suburban locations like Oregon and Iowa. It’s not immediately clear whether Microsoft’s decision to build in Silicon Valley represents an evolution in its data center strategy, or (perhaps more likely) is simply an opportunistic move in a supply-constrained market.
Local media reported Friday that Microsoft has paid $73.2 million to buy land near the interchange of Routes 237 and 880 in San Jose. The 65-acre property, known as the 237 Industrial Center, is currently farmland with several small structures. Microsoft brought the land from the Cilker family, which has run orchards and real estate in Silicon Valley.
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