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Microsoft is mulling on to set up a new Azure region in China to ramp up its cloud portfolio via its local operating partner, 21Vianet.

This move came due to the increase in demand for cloud services in China. The company also will fight with leading players like Alibaba and Baidu to cash on the growing market share for the company.

In a blog post, Microsoft said that it is expected that this expansion will double the capacity of Microsoft’s intelligent cloud portfolio in China in the coming years, which includes Azure, Microsoft Office 365, Dynamics 365, and Power Platform operated by 21Vianet.

According to the white paper, China Cloud Industry Development1, the cloud market in China is expected to reach 300 billion yuan (approximately $46 billion) in 2023.

To handle the pandemic situation, 63% of the Chinese organizations are taking the advantage of cloud-related innovations to accelerate digitisation in their products, payments, e-commerce, automation, and more.

“This unveils a big opportunity. Microsoft Cloud operated by 21Vianet was the first international public cloud compliantly launched in China through a local operating partner,” Alain Crozier, Chairman and Chief Executive Officer of Microsoft Greater China Region (GCR), said in a statement.

“The upcoming region will reinforce the capabilities to help further nurture local talents, stimulate local innovation, grow local technology ecosystems, and empower businesses in a wide range of industries to achieve more,” Crozier said.

Since 2014, Microsoft has teamed up with 21Vianet to run its cloud services in China as foreign cloud service providers are prohibited from owning and operating their own datacentres in the country.

In accordance with Chinese regulatory requirements, Azure regions operated by 21Vianet in China are physically separated instances from Microsoft’s global cloud but are built on the same cloud technical base as its global peers.

The consistent architecture across China and global markets makes it easy for multinational companies to transplant their IT systems and business applications to China or vice versa.

“Announced in 2012, and officially launched in March 2014 with two initial regions, Microsoft Azure operated by 21Vianet was the first international public cloud service to become generally available in the China market,” Omar Khan, General Manager, Microsoft Azure, wrote in the blog post.

“Following Azure, Microsoft Office 365, Dynamics 365, and Power Platform operated by 21Vianet successively launched in China in 2014, 2019, and 2020,” said Omar Khan.

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