Microsoft has shown its confidence in the Irish economy as it announced that it will locate its new European data centre in Dublin.

The company - the world's largest software firm - will invest $500m in the new plant in Grange Castle Business Park in Dublin. About 10 to 15 new jobs will be generated when the 51,000 square foot plant is up and running by summer 2009.

The new facility is the latest development in Microsoft's software and services strategy and will provide support to the company's growing online services business throughout Europe, the Middle East and Africa.

The data centres will deliver Windows Live services and will store data for the company's online services businesses such as Window Live and MSN. Described as 'the place where the internet lives', it will house tens of thousands of servers providing information and web-based applications to internet users worldwide.

With the growth of audio and video applications, social websites, mobile devices and other internet demands, data centres are becoming more and more important as companies strive to increase online computing support centres to provide users with enhanced web services, a statement from the company said.                                                         

'The move to software and services is changing the way software is delivered and used and our global data centre strategy is central to facilitating this change,' commented Joe Macri, Managing Director at Microsoft Ireland.

'The fact that Ireland has been selected as the location for this strategic infrastructure is a very strong endorsement of the success of our operations here over the past 22 years,' he added.

The Dublin centre will be the first 'mega data centre' outside the US specifically targeted for the growth and performance of Windows Live services.

Microsoft has been in Ireland for the past 22 years and employs over 1,200 people full time.