Microsoft opens ‘first’ foreign cloud service

Microsoft officially rolled out its cloud service in China on Wednesday, claiming it is the first foreign player in the country's small but potentially huge cloud computing sector.

"Microsoft is committed to do whatever it takes to make sure Azure [Microsoft's cloud service] is the first and best in China," Doug Hauger, Microsoft's general manager for China commercial cloud services, said during a press conference Wednesday.

A report by Beijing-based research firm CCID Think Tank in June showed that in 2013, China's cloud computing market was valued at more than 5 billion yuan ($805.5 million), partially driven by local governments' increasingly growing interest in developing the cloud computing industry.

CCID predicted the market could be worth 8 billion yuan this year.

Microsoft rivals like Amazon and IBM have also seen opportunities in the market.

Amazon.com Inc announced in December that it will introduce its cloud-computing service to China.

In July 2013, IBM said it is partnering with Beijing-based Capitalonline Data Service Co to offer cloud services suitable for Chinese enterprises.

Microsoft believes that it may get a leg up on its foreign peers, citing its earlier deployment in the market. The company has long been promoting its cloud service in China and its Azure service, operated by Beijing-based Internet data center services provider 21Vianet Group, was available for public preview in June 2013.

Regardless of potential threats from foreign competitors, what the US software veteran should be concerned most is whether it can get accustomed to stricter Chinese policies over data access and whether it have a good understanding of the demands of local companies, Fu Liang, a Beijing-based independent analyst, told the Global Times on Wednesday.

"Foreign companies like Microsoft can do a great job of providing cloud services for big companies in China, but local rivals such as Aliyun [run by China's e-commerce giant Alibaba] have an edge in the small- and medium-sized enterprise (SME) segment which is still immature and can facilitate faster growth," said Fu.

Zhang Yaqin, chairman of Microsoft Asia-Pacific R&D Group, said he knows China is a complex and challenging market with diverse needs for cloud service.

In order to cope with this, Microsoft cooperated with Zhengzhou-based Yunhe Software Technology in March to popularize Azure among local SMEs, Zhang said Wednesday.

Without doubt, companies will benefit a lot from cloud services, but the Chinese market is still small and many companies hesitate to embrace cloud services out of security concerns, said Zhang Yi, CEO of Shenzhen-based iiMedia Research.

Microsoft still has a long way to go before successfully educating the market, said Fu.