June 18, 2021: Microsoft Corp. plans to add four new data centers by early 2022 in a major effort to expand its services in Asia within China, according to people familiar with the strategy who wish to remain anonymous.
Microsoft’s expansion into China is among the fastest growing for the continental company, and in March it announced plans to expand its data center network with a larger presence in the northern region around Beijing.
The Redmond, Washington-based tech giant already has six data centers in the country, run by local partner 21Vianet, and now wants to take advantage of the global increase in demand for Internet services during this epidemic. A Microsoft spokesman declined to comment.
Rapid growth is being driven by Chinese businesses, which in the past were slow to digitize, are now migrating to the cloud. The new regulations, which include a large-scale data security audit to take effect in September, are also signaling to domestic and foreign businesses to move to local data management and increase IT costs. According to an official white paper by Microsoft, the cloud market in China will grow to $46 billion in 2023.
Like Apple Inc., Microsoft is working with local partners in China to expand data capabilities, which is likely to accelerate data storage and management needs. But it is Alibaba Group Holdings Limited and Huawei Technologies, both of which are partnering with domestic leaders to provide cloud infrastructure.
Microsoft can rely on the maturity and universality of its cloud services. Its Azure Enterprise offering enables users to host data and run applications in the cloud, while Office 365 provides Internet-based versions of its leading word processing, spreadsheet and collaboration programs.
The company said its planned expansion of North China in 2022 would “effectively” double its intelligent cloud capacity in the country in the coming years. The Redmond firm’s commercial cloud sales rose 33% to $17.7 billion for the quarter ended March 31.
During the same period, the company reported a capital expenditure of $6.6 billion and predicted that it would spend even more in the current quarter.
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