The next logical step to take is to now hit the tap icon and select your water preference. The prefered choice is definately the water tower as your first water building, it wil be more than enough to service the needs of your City initially. So check your water map, and check where your industry is (industry will pollute your water supply) then place your first tower towards anywhere where you see some dark blue next to a road. These will eventually dry up and be demolished so it doesn't matter if these are in prime locations initially as they won't be there for ever.
Later in the game you'll be utliising the water plants which have much higher output and offer a water treatment option for cases when you place a water plant next to water with ground pollution.
This water tower is plopped close to industry be careful of ground pollution
While I have cautioned you about plopping a water building close to industry if it is just far away it still makes sense to use the water BEFORE it get's polluted. Once it is polluted you can still use it but with the addition of water treatment facilities.