Cloud-computing powerhouse VMware confirmed that it will magnify its headquarters in the Stanford Research Park by taking over a million square feet of adjacent lot abandoned by pharmaceutical giant Roche last year. It won the bidding against search giant Google, and several other unnamed companies. The expansion will increase VMware’s lot area from 30 acres to 100 acres and from 5 buildings to 22. It also means some 2,500 more jobs as the lease the $225 million lease runs through 2045.

“I can’t say exactly when it started, but we’re seeing a very distinct change in the Research Park and around the valley toward a new optimism,” said Jean Snider, managing director of real estate for Stanford University who helped coordinate the corporate musical chairs behind the lease transfer. “There’s a real bullishness out there and it’s not just VMware. All these companies are talking about hiring.”

The renovation is estimated to cost $30 million, and the area will hold twice more employees it currently has in Palo Alto, and a third of its total global workforce. “This is another indication that Palo Alto really sits at the center of Silicon Valley,” said Palo Alto City Manager James Keene. “We have this unique convergence of talent and leading companies in the tech, cleantech and social networking sectors who all want to call Palo Alto home.”

VMware, the virtualization company founded in 1998 by a group of engineers, is on the road to expansion, as storage and cloud computing become pertinent for industry growth in every corner of the enterprise.  Even as some rivals are building out their own company footprint, VMware is looking to meet future demand.

“VMware’s building the bridge from the past to the future,” says Trip Chowdhry, an analyst at Global Equities Research.”Like Apple, Salesforce.com and Red Hat, they’re one of the post-recession companies that will dictate the tone of the IT industry. And they’re all expanding and they’re all hiring.”