Mi­crosoft to ex­pand China cloud busi­ness

China Daily (Canada) - - ACROSS AMERICAS - By MA SI in Beijing masi@chi­nadaily.com.cn

Mi­crosoft Corp will step up ef­forts to ex­pand its cloud com­put­ing busi­ness in China as lo­cal en­ter­prises are em­brac­ing new tech­nolo­gies to boost pro­duc­tiv­ity, a top ex­ec­u­tive of the soft­ware gi­ant said on Tues­day.

Ralph Haupter, CEO of Mi­crosoft in China, said de­spite China’s eco­nomic slow­down, the com­pany is see­ing an in­creas­ing de­mand for its cloud ser­vice Mi­crosoft Azure.

“Though the GDP growth is slow­ing down, Chi­nese com­pa­nies still need to fo­cus on three points to re­main rel­e­vant and com­pet­i­tive: in­no­va­tion, pro­duc­tiv­ity and the re­turn of in­vest­ments. And cloud com­put­ing can help in all of the above three as­pects,” he added.

The com­pany said on Tues­day it has more than 65,000 cor­po­rate cus­tomers for Azure in China, up from about 50,000 a year ago. The ser­vice was launched in the coun­try just two years ago.

Of­fice 365, the cloud ver­sion of its pop­u­lar Of­fice soft­ware, has at­tracted about 10,000 Chi­nese cor­po­rate cus­tomers, who have bought more than 1 mil­lion suits of Of­fice 365.

“We will fo­cus on man­u­fac­tur­ing, re­tail, au­to­mo­tive, me­dia and other in­dus­tries to fur­ther ex­pand mar­ket share,” Haupter said. He de­clined to of­fer more de­tails.

Ear­lier this month, Mi­crosoft low­ered the price for part of its cloud com­put­ing ser­vices amid in­ten­si­fy­ing com­pe­ti­tion from ri­vals like Ama­zon.com Inc and China’s home­grown in­ter­net heavy­weights Alibaba Group Hold­ing Ltd and Ten­cent Hold­ings Ltd.

The US com­pany is try­ing to change from a soft­ware ven­dor into a ser­vice provider by boost­ing its cloud com­put­ing ca­pa­bil­i­ties.

Cloud com­put­ing of­fers cus­tomers shared ac­cess to soft­ware or the pro­cess­ing power of ven­dors, which they can use over the in­ter­net. The model saves clients the cost of run­ning their own in­for­ma­tion tech­nol­ogy depart­ment, and they will only have to pay for the re­sources they use, like util­ity bills.

Ac­cord­ing to the research firm Gart­ner Inc, the global cloud com­put­ing in­dus­try will grow nearly 17 per­cent to $204 bil­lion this year and it is likely to hit $312 bil­lion in 2019.

Ji Yan­hang, an an­a­lyst at Beijing-based in­ter­net con­sul­tancy Analysys In­ter­na­tional, said the Chi­nese cloud mar­ket is still in its in­fancy, but it is al­ready a fiercely com­pet­i­tive sec­tor.

“China’s na­tional strate­gies, such as boost­ing high-end man­u­fac­tur­ing, will in­crease de­mand for cloud ser­vices in the com­ing years.”

But for­eign com­pa­nies are fac­ing more dif­fi­cul­ties than their Chi­nese coun­ter­parts as some gov­ern­ment bod­ies and State-owned en­ter­prises are aban­don­ing over­seas tech­nol­ogy for do­mes­ti­cally made al­ter­na­tives due to in­for­ma­tion se­cu­rity con­cerns, Ji added.

In Septem­ber, Mi­crosoft and its Chi­nese cloud com­put­ing part­ner 21Vianet Group Inc set up a joint ven­ture with the State-owned in­for­ma­tion tech­nol­ogy com­pany Unis­plen­dour Corp Ltd, aim­ing to break into the gov­ern­ment and SOE mar­ket.

Haupter said: “So far, the part­ner­ship is go­ing well. Since Septem­ber, we have inked deals with (gov­ern­ments in) more than 10 cities and prov­inces in China. More progress can be ex­pected pretty soon.”

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