It’s not a big secret that Microsoft has had the Chinese market in their crosshairs for a while, now. With their recent foray into Chinese mobile technology, it’s not a big stretch to imagine their involvement in the Chinese cloud computing industry. In September, the software giant announced that it would be heavily investing in the Chinese market.
The plan is to recruit upwards of 1,000 new employees over the fiscal year. These employees will work in research, enterprise services and overall support for the Chinese branch of Microsoft. The big picture strategy is to increase their Chinese investments by 15 percent from their already robust $500 million. On top of that, they plan to expand into 15 provinces and 20 cities throughout the country.
Their employees are also expected to work closely with local officials to aggressively promote their cloud offerings, Office 365, Microsoft Azure and Windows Server 2012.
Another appropriate question would be, why not China? Microsoft is seeing major success in the Chinese smartphone market with their Windows 8 push on Nokia devices, and they expect to see further growth with their push for cloud services. From a corporate standpoint, the enterprise field is ripe with business potential for Microsoft to harvest.
Challenges Within the Chinese Market
With Microsoft primarily bringing SaaS offerings to China, they’re headed for some significant challenges. For starters, Chinese software users are world renown for pirating applications of all stripes. Positioning their cloud offerings as products that should be paid for will be a significant challenge. The other big challenge has to do with the local officials. Historically, Chinese officials have been less than cooperative with American tech companies aiming to infiltrate the Chinese tech market.
The Future of Cloud Computing in China
Significant challenges aside, Microsoft has big plans for the Chinese market, and none of them are bad. Since the bulk of Microsoft’s efforts in recent years have been placed on the Nokia mobile market in China, the software giant will likely build on their existing cloud offerings to be highly compatible with smartphones. According to Microsoft’s CEO for their Chinese expansion efforts, their existing cloud computing technology is a natural fit for the Chinese market, and the company doesn’t see it as being an off-the-wall approach to product development. Many cloud hosting companies are expanding their products and where they’re offering them, so look for more businesses to go East if Microsoft does well.
Another thing that will likely come about from this China expansion project is accessibility. This is due to the fact that many software users in Chinese providences are pirating software because most of it is inaccessible. If Microsoft is smart, they’ll work with local Chinese officials to ensure their cloud offerings are as accessible as possible for general use.
For many tech companies, expanding into major Asian markets has always presented itself as somewhat of a gamble. The good news is that Microsoft has spent the last several years making nice with key decision makers in that market. Judging from their current posture, they seem confident enough that their expansion efforts will result in large-scale cloud adoption in organizations throughout the region.