Microsoft to further expand cloud services in China

Microsoft Corp is bullish on the Chinese cloud computing market, as the US tech giant is committed to helping both multinationals come to China and Chinese companies go global, a company executive said.

The comments came as Microsoft is scheduled to bring a new data center online in China in the spring of 2022. Once the expansion is completed, the capacity of Microsoft's cloud computing in China will have been boosted by 12 times since 2014.

Joe Bao, president of Microsoft China, said the company's local cloud computing customers and partners are growing rapidly. "We really think that we have an opportunity to grow faster (in China) than Microsoft in the rest of the world."

On top of laying down a sound cloud infrastructure and perfecting its cloud solutions, Microsoft has also been working hard to build on industry expertise to better serve customers, he said.

The senior executive did not disclose the specific revenue growth target for its cloud computing business in China. But the latest financial report from Microsoft showed that in the September quarter, its global intelligent cloud revenue hit $16.96 billion, up 31 percent year-over-year.

Data from market research company Canalys showed that Microsoft accounted for 21 percent of global cloud infrastructure services spend in the third quarter of 2021. Growing over 50 percent for a fifth consecutive quarter, Microsoft Azure was the second largest cloud service provider, second only to Amazon Web Services.

Charlie Dai, a principal analyst at Forrester, a business strategy and economic consultancy, said Microsoft was the first global vendor to commercialize its public cloud operations in China, and it has sustained its local expansion by efforts that include continuing to focus on industry cloud service customizations.

The intensified push to tap into the cloud computing market is part of a three-year plan unveiled in June by Microsoft China, which sees strong opportunities in accelerated digital transformation in the world's second-largest economy.

"China's swift and determined response to the COVID-19 pandemic, and the continued diligence that China has to keep the pandemic in check, have allowed the nation to recover and return to growth faster than other nations in the world," Bao said.

Microsoft is excited about its business in China in areas including remote collaboration and hybrid work, leveraging digital intelligence to boost business resilience and sustainable development, the executive said.

At the fourth China International Import Expo being held offline in Shanghai on Nov 5-10, Microsoft announced its cooperation with SGS China to launch S-Carbon, the world's first-ever dual-standard intelligent cloud carbon management platform, based on Microsoft's cloud computing platform Azure. SGS is a world-renowned company specializing in carbon inventory and audit.

Seeing the big potential of leveraging digital innovation in boosting China's healthcare industry, Microsoft and Johnson & Johnson, a leading world healthcare company, announced over the weekend that they will deepen cooperation in the Chinese market.

Apart from seeing China as an important market, Microsoft is also stepping up its push to help nurture local innovation by hiring more people, and partnering with local universities.

In late October, Microsoft Asia-Pacific Research and Development Group announced it will start constructing the third phase of its research institute in Suzhou Industrial Park in Suzhou, Jiangsu province, in 2022.

The project is expected to be finished by 2025. By then, the number of Microsoft's employees in Suzhou is forecast to reach 5,000, from the current number of more than 2,000, said the Suzhou Industrial Park. "We are committed to fostering local innovation, promoting joint innovation with our partners and helping bring China's homegrown innovation to the outside world," Bao said.