Microsoft launches new data center region in China

Microsoft launches new data center region in China

Beijing, 3/3/2022

Microsoft aims to help multinational companies locate in China as well as Chinese companies internationalize with the launch of its new data center region in China.

A data center region is a physical location where companies cluster data centers. With this move, Microsoft has increased its cloud computing capacity in China, the world’s fastest-growing public cloud market, 12-fold since 2014.

Joe Bao, president of Microsoft China, said the new data center in northern China is Microsoft’s largest to date in the Chinese market. Currently, about 40 percent of Microsoft’s cloud computing business in China comes from helping multinational companies set up such operations in the country, 40 percent from helping Chinese companies go international and about 20 percent from providing specific industry expertise in China, Bao said.

There is clearly no shortage of staff. Microsoft has hundreds of thousands of developers, partners and customers in its cloud in the Chinese market, he said. Emphasized Bao. „In areas such as helping multinational companies set up shop in China, we are seeing an average year-on-year growth of over 50 percent,“ Bao added.

With digital transformation accelerating in the world’s second-largest economy, Microsoft is focusing on local solutions for automotive, healthcare, retail, manufacturing and low-carbon development, the executive said. For example, the company is bringing its Azure Digital Twins cloud service to China, hoping to offer local customers the ability to create digital twins of physical objects in the cloud to increase efficiency.

Data from market research firm Canalys shows that Microsoft had 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 after Amazon Web Services.

Charlie Dai, principal analyst at Forrester, an enterprise strategy and economics consulting firm, said that as the first global vendor to commercialize its public cloud operations in China, Microsoft Azure has gained the trust of enterprises and supported local business expansion through the progressive localization of its services and the synergy of the ecosystem between enterprise collaboration tools, digital operating platforms and the Azure solution.

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

But there are also challenges, including fierce competition from 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 presence with more than 200 physical data centers in 34 markets, technological innovation, and commitment to security and compliance,“ Bao added.