Microsoft will spend $150 million dollars building a second data center alongside its $499 million facility already under construction in southern Virginia – a move that underlines the software giant’s efforts to create a set of “cloud computing” services that compete with the likes of Google and Amazon.

As the company expands construction in Boydton, Virginia – a town less than two hours south of Richmond – it’s also spending an estimated $700 million on data centers in Des Moines, Iowa and Dublin, Ireland.

“Microsoft says they’re all in for the cloud computing market. I believe them,” David Smith, an analyst at Gartner, told Wired.

Governor Bob McDonnell announced Microsoft’s $150 million Virginia expansion on Friday, saying the company would add 21 megawatts of electric power capacity to the Boydton site. Microsoft did not immediately respond to a request for comment, but the company acknowledged the expansion with a canned quote tossed into the governor’s press release.

“Microsoft is excited to once again expand its cloud infrastructure and services capacities in Boydton,” said Dayne Sampson, a corporate vice president in Microsoft’s Global Foundation Services group. “We greatly appreciate the work that Virginia’s Governor and local officials have done to make the Commonwealth a great place for Microsoft to continue to invest in to enable the best possible delivery of services to our current and future customers.”

The two-headed Microsoft project is one of the largest in the history of southern Virginia, and it’s expected to add about 60 jobs to the state’s economy.

As Data Center Knowledge points out, the announcement may indicate that Microsoft needs more data center capacity in the short term than previously expected. Other outfits such as  Google, Facebook, and Yahoo! will build multiple data centers on the same site, but typically, they will complete one before building more. Microsoft, it seems, is now building two Boydton facilities at once.

It’s unclear what services the data center will house, but Microsoft is heavily pushing Office 365 (a web-based version of its existing Office productivity software) and its Windows Azure “platform cloud” (a service that lets developers build, deploy, and readily scale applications) as well as Bing and other consumer online services.

When you consider that the Boydton site is within spitting distance of the nation’s capitol, Office 365 and Azure are likely tenants. In February, the federal government laid out its plans to adopt cloud computing, estimating the move would increase server efficiency up to 70 percent. The Boydton facilities could bolster Microsoft’s position against Google, Amazon, and others when bidding on the feds’ business. Both Google and Amazon have data centers in the area, and both are offering services specifically designed for the federal government.

According to Data Center Knowledge, Microsoft’s Boydton data centers will use Microsoft’s modular datacenter architecture, known as IT-PAC (pre-assembled components). This allows the facility to add and configure new servers depending on capacity and need, giving the company some much needed flexibility. Drawing on ideas first floated by the Internet Archive, Google pioneered the art of modular data center design, and many outfits have followed.