"We literally take outside air and pump it directly into the server room," Clayton said.

The Dublin data center's PUE (power usage effectiveness) is 1.25, which means for every one watt of server power, there's .25 of a watt dedicated to cooling and other electricity-consuming functions, Clayton said. The industry average PUE for data centers is between 2 and 2.4 PUE. Microsoft's average for all of its data centers is 1.6, although the company wants to reduce that to 1.125 by 2012.

The facility can now generate up to 5.4 megawatts of critical power. Eventually, it will be possible to expand to 22.2 megawatts, Microsoft said.

Customers have the option of having their applications run on their own dedicated server or sharing hardware, which is a cheaper option, Clayton said. Some administrators don't like the idea of their data being on the same physical server as that of other companies, although virtualization technologies make those arrangements generally more efficient.

Microsoft's moves toward cloud computing have come as the company repeatedly emphasizes that it doesn't see those services replacing on-premise software, or applications installed on PCs.