Microsoft Canada will spend $90-million a year to operate a new training and research centre that will be a key tenant in the massive redevelopment of Vancouver's downtown Pacific Centre mall.
The Microsoft Canada Excellence Centre, announced Thursday, will occupy two of four floors of office space above a three-level Nordstrom outlet that is being rebuilt from a former Sears store.
Sears had been an anchor for the largely underground mall, opened in 1971 and now home to about 102 stores and services.
The Nordstrom renovation – part of a widespread move by the Seattle-based retailer into Canada – and new Microsoft centre are expected to open in 2015.
Microsoft has signed an 11-year lease for this facility, which will occupy 143,313 square feet and employ 400 people.
"It's a tremendous commitment to our project," said Ultan Kampff, general manager of Pacific Centre. "To have a high-profile client like Microsoft decide to locate at Pacific Centre speaks to the calibre of properties that Cadillac-Fairview operates."
Microsoft Canada's commitment will generate 400 new jobs, effectively doubling the company's local work force.
It comes as the company focuses more of its business in Canada on cloud and mobile services.
"This is a really significant investment for Microsoft. It's not every day that we do this and it really does represent a vote of confidence in Vancouver," Karen Jones, the company's deputy general counsel, said in an interview after the announcement.
She said Vancouver was appealing given the region's universities, their programs in computer science and a strong work force in place already – as well as the proximity to Microsoft headquarters in Redmond, Wash.
Ms. Jones quipped that some in Redmond might wonder why Microsoft didn't just expand its operation in the Seattle-area community, but that Microsoft feels it has to diversify geographically and reach out to hubs that can offer new talent.
The company said Thursday that no tax or other incentives were used by either the province or city to draw it to this new project in British Columbia.
"We felt the opportunity was a strong enough opportunity for us to make the investment without the need for additional incentives," Ms. Jones said.
Vancouver Mayor Gregor Robertson, attending the announcement, said it was "great news" when companies of Microsoft's stature are "compelled to be in Vancouver" and create jobs in the community.
Mr. Robertson said incentives are no longer necessary to make Vancouver an appealing destination for companies. "We're moving beyond that phase with some industries and able to compete toe-to-toe and attract people and investments from around the world."
The new jobs will be mostly in the company's applications and services group, responsible for research and development for Microsoft Office, Office 365, Skype, Bing, MSN, Exchange, Yammer and Advertising platforms.
In an interview with The Globe and Mail, Microsoft Canada president Janet Kennedy said the jobs will focus on "mobile-first, cloud-first" deemed the future for the company.
She said that when she arrived in October, she was told that the "cloud has not taken off in Canada," but enterprise clients of Microsoft's cloud services already include Lululemon, Tim Hortons, Air Canada and Rogers Communications.
Microsoft set up in B.C. in 2007, and currently has about 300 employees working on video games and TV products.
Thursday's announcement includes a commitment to Foundry Vancouver, a paid 16-week internship program for 50 university students recruited from across Canada. "This is a personal passion of mine; I'm the product of two teachers," Ms. Kennedy said.
Modelled after a successful partnership Microsoft struck with MIT in Boston, the students will eventually be working with the new application and services group.