Microsoft plans to recruit 100 people over the next year to support the growing needs of its Irish operations.

The company made the announcement yesterday at the opening of its new Atrium office building in Sandyford and its European internet data centre in Citywest as part of a $165 million (€177 million) investment programme over two years.

Microsoft, which employs around 1,800 in Ireland, hired an additional 100 staff in the past year, the company said. Twenty-eight of the new jobs will be in the sales, marketing and services group serving the Irish market.

The new Atrium office will serve as the command centre for Europe, Middle East and Africa (EMEA) operations. It will also serve as the hub for development work in Europe. Around 800 people will be employed in the 180,000 sq ft building.

The internet data centre, which will act as the hub for Microsoft's internet traffic in Europe, houses more than 250 servers, and is linked to the Atrium building by a broadband connection.

"We are on track for rolling out additional elements of our corporate hosting and .NET strategy using this strategic infrastructure over the coming months and years," said Mr Kevin Dillon, Microsoft vice president for EMEA and managing director of its European operations centre in Dublin.

"Ireland is now firmly positioned as the European internet hub for Microsoft, and the company remains fully committed to its strategy of hosting from Ireland and to supporting the corporate strategy of software as a service."

He added: "The decision by Microsoft to locate this data centre in Ireland is an indication that the Irish Government's vision of Ireland as an e-location is on track."

Microsoft's operations in Ireland are now the second largest, after Japan, outside of its company headquarters in the US.

Both centres in Dublin were officially opened by the Taoiseach, Mr Ahern, and US ambassador, Mr Richard Egan, by unveiling digital plaques.

Mr Ahern described Microsoft as an "icon of the positive changes that have taken place in Ireland in the past two decades".

In his first reference to European enlargement since the General Election, the Taoiseach said there would have been no Celtic Tiger and far lower levels of investment in the Republic without Europe.

"As a result there would have been much weaker trade, fewer jobs, continued emigration and lower quality of life," he said.

"The future scenario is equally stark. If we want Ireland to remain at the forefront of the high-tech and knowledge economy, we will have to be at the forefront of Europe.

"If we want to secure our progress and protect our prosperity we will have to go closer to the heart of Europe.

"It would be very costly to stand back now - just as an enlarged, dynamic Europe of 27 states moves ahead."

Mr Ahern said that Ireland must stay at the core of decision making to defend its national interest on jobs, tax, competition and e-commerce.

But he said analysis of the result of the Nice referendum indicated that the Government had more work to do to make these economic and political realities clearer to Irish workers and farmers who depend on European markets for their jobs.

"We export over 60 per cent of everything we produce to one single market - and that market is Europe," the Taoiseach said.

"The country has thrived in Europe. Europe has been good for jobs, for prosperity and it has given us more influence over our destiny than the founders of the State ever imagined possible. And if we are going to sustain national progress and prosperity, we must stay at the heart of an enlarged Europe by ratifying the Nice Treaty," he said.