Microsoft has announced, swiftly after Amazon Web Services made a similar decision, that it will be building two new data centers in the UK. This looks like an attempt to allow the company to bid for cloud computing contracts which include sensitive government data. It has been prevented from bidding for some of these in the past because of data location laws.
The announcement, made by Microsoft chief executive Satya Nadella in London, follows a similar declaration by Amazon last week. Microsoft is in the middle of a battle with the US government over the privacy of its customer’s data when it is stored overseas with the US government demanding that it releases emails resident on Irish Microsoft servers. The US government considers the data fair game since it resides on servers owned by Microsoft.
Microsoft completes its current expansion plans
Microsoft has allegedly completed its current expansion plans for its Irish and Netherlands data centers – hence the decision to build in the UK. As the move to the cloud engulfs all Microsoft, Google, Amazon and others are building more data centers globally to provide fast web-based services but, as importantly in our global village, to deal with local laws and customer prferences for digital information. Microsoft Azure and Office 365 will be generally available from local UK-based data centres in late 2016 with Microsoft Dynamics CRM Online following shortly thereafter. These services will offer customers data residency in the UK, bringing reliability and performance to government organisations, regulated industries and other businesses.
Microsoft also announced completion of the latest phase of expansion for its data centre facilities in Ireland and the Netherlands, both of which serve as cloud computing hubs for European customers. These new cloud offerings and expanded facilities will provide customers with more choice and increased opportunities to innovate more quickly, enabling growth for local economies.
Satya Nadella, chief executive officer of Microsoft. “By expanding our data centre regions in the UK, Netherlands and Ireland we aim to give local businesses and organisations of all sizes the transformative technology they need to seize new global growth,”
Avanade UK’s General Manager, Julian Tomison said the following: “News that Microsoft plans to open UK-based data centres in the next calendar year is great news for the UK and the technology sector as a whole. This announcement, and the investment behind it, validates the sector and will ultimately have a positive impact on the cloud industry; collectively this will benefit the UK and the industry as customers feel they have more control over where their data is stored.
He continued: “Questions around data residency aren’t new, but at least now we have a new solution. Having data centres in the UK helps us stay competitive when prices and services are becoming uniform. Moving forward, I predict that we’ll see more of investments like this, especially as legislation like last month’s Safe Harbour ruling continue to shape the legal situation in the UK and the EU.”
Microsoft and Amazon Web Services provide online storage and data analysis via their respective cloud platforms Microsoft Azure and Amazon Web Services. Microsoft said that it will sell Azure computing power and Office 365 apps from the UK beginning in 2016.
Microsoft said in 2014 that it would allow foreign customers to opt to have personal data stored outside the U.S., in response to concerns about government snooping.
Microsoft’s corporate cloud revenue reached $8.2bn on an annualized basis last quarter, with commercial sales of Office 365 - the cloud version of its productivity software suite - rising almost 70 percent and Azure sales more than doubling.