Microsoft pushes for increased cloud services adoption in Asia

Software giant says it has more data centres than its closest rivals combined

PUBLISHED : Tuesday, 01 August, 2017, 7:04pm
UPDATED : Tuesday, 01 August, 2017, 11:07pm

Microsoft Corp expects to drive the digital transformation of more enterprises in Asia on its cloud computing platform, backed by its expanding network of data centres in the region.

The software giant’s effort represents the heated arms race between the world’s major cloud services industry players to build an extensive infrastructure for their users, according to analysts.

“We have more data centres globally than Amazon Web Services, Alibaba Cloud and Google combined,” Microsoft Asia president Ralph Haupter told the South China Morning Post.

Microsoft estimated it has invested about US$18 billion to date in establishing a network of 38 data centres around the world, with two new facilities in Busan and Seoul in South Korea that opened in February as the latest additions in Asia.

Data centres are secure, temperature-controlled facilities used to remotely store large amounts of data, manage business applications and host cloud computing operations.

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“We’re very committed to building up our platform and technologies to enable more companies to pursue digital transformation with our intelligent cloud services,” Haupter said. “This is our priority.”

Digital transformation is the process by which enterprises adapt digital competencies to create new business models, products and services, according to research firm IDC. It said 60 per cent of the Asia-Pacific’s top 1,000 companies will have digital transformation at the centre of their strategy this year.

Haupter said about half of the companies on Hong Kong’s Hang Seng Index use Azure, the Microsoft cloud platform on which enterprises can build, test, deploy and manage their business applications.

“Across Asia, we’re seeing more [video] game companies, such as those in Korea, Japan and China, use Azure as a platform to develop and run their games,” he said.

Microsoft posted an 11 per cent year-on-year growth in total cloud services revenue of US$7.4 billion in the quarter ended June 30, lifted by a 97 per cent rise in its Azure business.

“We believe the public cloud market will ultimately consolidate around four primary vendors: Amazon Web Services, Microsoft Azure, Google Cloud Platform and Alibaba Cloud,” said a new Morningstar Research report.

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It said Amazon, Microsoft, Google and Alibaba Group, which owns the Post, have the scale to build a global data centre footprint, research and development resources to create premium services, and technical know-how to attract enterprises and developers.

IBM, the world’s largest information-technology services provider, remains behind those four in the cloud market, despite operating nearly 60 data centres worldwide, the report said.

Cloud services enable companies to buy, lease or sell software and other digital resources online on demand, just like electricity from a power grid.