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Posted by Gene Cao on December 17, 2012
with Rita Xia
On November 2 in Shanghai, Microsoft announced the availability of Office 365 and Windows Azure services for customers in mainland China; both have been available in Hong Kong for several years. Through its collaboration with 21Vianet Group and HiSoft (now part of PactEra, a merger of HiSoft and VanceInfo), Microsoft is the first multinational vendor to provide public cloud services in mainland China delivered through onshore cloud infrastructure.
Under the agreement, Microsoft has authorized 21Vianet Group, which has a “value-added telecommunications service” license, to operate Office 365 and Windows Azure in China. This is critical to Microsoft’s overall strategy in China, as only Chinese companies qualify for this government license, which is normally issued by ministry or provincial bureaus of MIIT (the Ministry of Industry and Information Technology). Under the terms of the agreement, Microsoft is sharing cloud services revenue with 21Vianet Group and in exchange is able to leverage 21Vianet Group’s license to operate cloud data centers in China.
Microsoft’s entrance into the public cloud services market in China will affect both local and multinational cloud services/technology vendors in a number of ways:
China remains a challenging market for Microsoft. More details can be found in Bryan Wang’s blog. As an early entrant in the domestic cloud services market, Microsoft is well positioned to grow business in mainland China while also strengthening links with various Chinese government agencies.
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