Microsoft eyeing a massive expansion in China

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According to sources that are very familiar with Microsoft’s strategy who requested not to be identified because the strategy’s contents aren’t public yet, the company aims to build four additional data centers in China by early 2022 as part of a larger push to increase its service capacity across Asia. Microsoft’s growth in China is one of the quickest on the continent, and the firm revealed plans to improve its data center network in the northern area near Beijing in March. The Redmond, Washington-based computer giant already has six server farms in the nation, which are run by local partner 21Vianet, and is now looking to profit on a worldwide increase in internet demand during the epidemic.

A spokesperson for Microsoft declined to comment.

Chinese firms, which were sluggish to digitize in the past but are increasingly shifting to the cloud, are driving the rapid development. Domestic and international businesses are also shifting to local data management and increasing IT investment as a result of new laws, notably a broad set of data security edicts due to take effect in September. According to a government white paper published by Microsoft, China’s cloud industry is anticipated to reach $46 billion by 2023. Microsoft, like Apple Inc., is working with a local partner to enhance data capabilities in China, anticipating a surge in data storage and management demands. However, it will compete with Alibaba Group Holding Ltd. and Huawei Technologies Co., the two local cloud infrastructure heavyweights.

The maturity and ubiquity of Microsoft’s cloud services may be relied upon. Azure enterprise allows users to host data and execute apps on the cloud, while Office 365 provides web-based versions of the company’s popular word processing, spreadsheet, and collaboration tools. The business claims that its projected growth in northern China in 2022 would “effectively double” its current size.

The Redmond company’s commercial cloud revenues increased by 33% to $17.7 billion in the quarter ending March 31. The business recorded $6 billion in capital expenditures over the same time and expects to spend much more in the upcoming quarter. It does not separate cloud profits by location.

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