Microsoft is investing €170m (US$230.74m) to further expand its data center in Dublin.

It was originally granted planning permission in September for its fourth Dublin data center at its Grange Castle site. It said the expansion will create 380 building-related jobs.

An additional 20 people will join the 80 already based at the site once the data center, which was first expanded in February 2012, is fully operational.

Microsoft said the second expansion at the data center, which first opened in 2009, will increase the facility's computing capacity by 169,000 sq ft.

Cathriona Hallahan, Microsoft Ireland's managing director, said the expansion is evidence of the continued demand for the company's cloud service such as Office 365, Skype and Xbox Live across Europe, the Middle East and Africa. 

“Not only does this highlight the growth in our cloud services business but it also highlights our continued commitment to investment and innovation in Ireland and Europe,” Hallahan said.

Barry O'Leary, chief executive of IDA Ireland, the agency responsible for industrial development in Ireland, said the investment reinforces Ireland's credentials as the leading location for cloud computing. 

“Data centers have been a buoyant sector for IDA for the past number of years and Microsoft's continued investment in the sector will allow Ireland to win further investments worldwide,” O’Leary said.

Ireland already has a number of large data centers including those owned by Google, Amazon, IBM and Yahoo.

The Irish climate is seen as ideal for the development of data centers as it makes use of the cool outside air to cool the facilities all year round, resulting in energy efficiencies.