China ‘growth op­por­tu­ni­ties’ put Mi­crosoft on cloud nine

China Daily (Canada) - - VIEWS - By MA SI masi@chi­

Mi­crosoft Corp will triple its cloud ca­pac­ity in China within six months to meet the stronger-than-ex­pected de­mand from lo­cal com­pa­nies, its CEO Satya Nadella said in Bei­jing on Wed­nes­day.

Mi­crosoft told China Daily in June it plans to double its cloud ca­pac­ity in China to be able to serve nearly 200,000 en­ter­prise cus­tomers lo­cally in 2018.

Mi­crosoft’s up­dated plan ap­pears to in­di­cate a stronger growth mo­men­tum in China, one of the world’s largest IT mar­kets.

“China is one of the most dy­namic mar­kets, where en­ter­prises are ag­gres­sively push­ing for­ward dig­i­tal trans­for­ma­tion, cre­at­ing abun­dant growth op­por­tu­ni­ties,” Nadella said at a fo­rum, with­out dis­clos­ing spe­cific in­vest­ment fig­ures.

At the Mi­crosoft Tech Sum­mit, Nadella also an­nounced Azure Stack hy­brid cloud so­lu­tions de­vel­oped in col­lab­o­ra­tion with hard­ware mak­ers such as Huawei Tech­nolo­gies Co Ltd and Len­ovo Group Ltd will be un­veiled in the first half of 2018. The new cloud ser­vice is de­signed to meet en­ter­prises’ grow­ing de­mand for lo­cal data cen­ters with more flex­i­ble com­put­ing ca­pa­bil­ity.

Mi­crosoft said ear­lier it is aim­ing for triple-digit growth in Azure cloud ser­vices in China this year as well. It posted triple-digit growth in 2016.

The com­pany’s lo­cal cloud cus­tomers in­clude star­tups such as bike-shar­ing com­pany Mo­bike Tech­nol­ogy Co Ltd and big com­pa­nies such as Shang­hai Zhen­hua Heavy In­dus­tries Co Ltd.

Al­though locked in an in­tense race with Ama­ Inc in the boom­ing cloud com­put­ing sec­tor, the Red­mond, Wash­ing­ton-based com­pany man­aged rapid growth not only in China but glob­ally.

In the July-Septem­ber quar­ter, Mi­crosoft beat profit es­ti­mates on gains from cloud ser­vices, which pushed its mar­ket val­u­a­tion above the $600-bil­lion mark for the first time since the dot­com boom in Jan­uary, 2000.

Ac­cord­ing to mar­ket re­search com­pany Gart­ner, Mi­crosoft had about 7 per­cent mar­ket share in the pub­lic cloud ser­vice seg­ment in 2016, a dis­tant sec­ond to Ama­zon that had more than 44 per­cent mar­ket share.

But still, Mi­crosoft leads other com­peti­tors even as it faces ris­ing pres­sure from Alibaba Group Hold­ing Ltd in China.

The coun­try’s cloud com­put­ing in­dus­try is fore­cast to be worth 430 bil­lion yuan ($63.3 bil­lion) in 2019, up from 150 bil­lion yuan in 2015, ac­cord­ing to Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy data.

Char­lie Dai, head an­a­lyst at For­rester Re­search Inc, said China’s cloud mar­ket is get- ting in­creas­ingly crowded, with do­mes­tic and for­eign com­pa­nies slug­ging it out.

David Ku, cor­po­rate vi­cepres­i­dent for AI Core group at Mi­crosoft, said the com­pany is work­ing hard to in­te­grate ar­ti­fi­cial in­tel­li­gence tech­nol­ogy into its prod­ucts.


Peo­ple stand out­side a McDon­ald’s restau­rant in Bei­jing.

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