Microsoft CEO Satya Nadella recently announced their plans of building two data centers in the United Kingdom in 2016. Once the centers have been setup, the Redmond-based tech giant will be able to bid for cloud computing contracts.
Previously, Microsoft (NASDAQ: MSFT) was not permitted to bid on such contracts in the UK since their data centers were not based there. Businesses and consumers in UK will also benefit from a faster processing speed from their cloud-based apps and services.
Their cloud services include Azure and the popular Office 365. User data won't be needed to be downloaded and uploaded from and to international servers as they will be hosted in the UK.
What pushed Microsoft to announce their plan? Major cloud services rival Amazon has also announced that they will set up data centers in the same year.
Amazon (AWS) has several big clients in the UK when it comes to their services; Unilever, National Rail Enquiries, Trinity Mirror, Dennis Publishing and even the BBC. Meanwhile, Microsoft has Confused.com, Pizza Hut, Marks & Spencer and Tesco.
Mr Nadella said during the Microsoft Future Decoded conference in London: "At Microsoft, our mission is to empower every person and organisation on the planet to achieve more. 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."
Microsoft will be building one of the data centers near London and the other one in an undisclosed location but still in the UK, according to BBC News. Nadella said that the data centers will open in the early part of next year, although no exact date was announced.
The move comes after the declaration of the Safe Harbour treaty by the European Union's Court of Justice. Microsoft executive vice president of cloud and enterprise Scott Guthrie assured that customer data in the UK will stay in UK.
Data privacy has been an issue for some as government and authorities have been pressuring tech companies to let them peek around customer data to find terrorist threats and whatnot. Microsoft was one of the tech giants to stand up against such unwanted snooping around by officials.
In addition, the new data centers will also increase Microsoft's cloud service uptake in the UK. Combined with the recently finished data centres in the Netherlands and Ireland, Nadella believes that they will have an edge in the cloud computing industry, according to The Guardian.
Amazon AWS and Microsoft seem to be fighting for the top position in the clouds in the UK. Government chief technology officer Liam Maxwell said that both of the companies were expected to invest £2bn for the new data centres.
Without the two tech giants, the Government would have to spend £1bn for a data center to host their sensitive data. Fortunately, they can chose to outsource their data crunching and protecting operations to the two companies, according to The Telegraph. This will help them save money as they won't need to build their own.
Microsoft and Amazon's move to set up data centers in the UK will benefit almost every one. Consumes and app users will experience faster programs, businesses can also make use of faster cloud services and the government can outsource their sensitive data to the companies' protected data centers.