Microsoft bringing new data center online in China

By MA SI | China Daily
Updated: March 3, 2022
The booth of Microsoft during an expo in Shanghai. [Provided to China Daily]

Microsoft Corp is bringing a new data center region online in China, which highlighted the US tech heavyweight's long-term commitment to the market and its dedication to helping both multinationals come to China and Chinese companies go global, a senior executive said.

A data center region is a physical location where companies cluster data centers.

The move means that Microsoft's cloud computing capacity in China, the world's fastest-growing public cloud market, has been boosted twelvefold since 2014.

Joe Bao, president of Microsoft China, said in an exclusive interview with China Daily on Tuesday that the new data center, located in North China, is the biggest one Microsoft has in the China market so far, which will help the company better ride the next wave of the nation's digital development.

Currently, about 40 percent of Microsoft's China cloud computing business comes from helping multinationals set up such operations in the nation, 40 percent from helping Chinese companies go global and about 20 percent from delivering specific industry expertise within China, Bao said.

He said Microsoft now has hundreds of thousands of developers, partners and customers on its cloud in the China market, and its local cloud business has been outpacing the average industry performance and its internal targets.

"We are seeing on average over 50 percent year-on-year growth in areas like helping multinationals land in China," Bao added.

Amid the accelerated digital transformation in the world's second largest economy, Microsoft is prioritizing local solutions for automotive, healthcare, retail, manufacturing and low-carbon development, the senior executive said. The company, for instance, is bringing the cloud service Azure Digital Twins to China in hopes of offering local customers the ability to create digital twins of physical objects in the cloud to boost efficiency.

Data from market research company Canalys showed that Microsoft accounted for a 22 percent market share of global cloud infrastructure services spending in the fourth quarter of 2021, making it the second largest cloud services provider, only after Amazon Web Services.

Charlie Dai, principal analyst at Forrester, a business strategy and economic consultancy, said as the first global vendor to commercialize its public cloud operations in China, Microsoft Azure has gained the trust of enterprises and sustained local business expansion through progressive localization of its services, ecosystem synergy between enterprise collaboration tools, digital operation platforms and the Azure solution.

The strategic local partnerships Microsoft Azure has built with its leading position in the global public cloud market also drove its rapid growth in China, Dai added.

But challenges also exist, including fierce competition with players such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Huawei Technologies Co.

"Healthy competition makes us all better. Microsoft's unique advantage lies in our global footprint, including more than 200 physical data centers across 34 markets, technology innovation, as well as our commitments to security and compliance," Bao added.

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