Microsoft
MSFT
recently announced that it is investing in setting up a Data Innovation Centre of Excellence in Canada to help the local businesses ramp up digital transformation, as enterprises recover from the pandemic. The Data Innovation Centre will come up at Microsoft’s new downtown Toronto headquarters.
The tech giant will also add an Azure Edge Zone in Western Canada (Vancouver) to further strengthen its cloud presence in the country. Azure Edge Zones are primarily extensions of the company’s Azure platform. These zones assist in setting infrastructure in proximity to customers to back their “latency-sensitive workloads” and enhance connectivity to cloud environment, noted Microsoft.
Further, Microsoft will recruit 500 new employees for its Vancouver operations in 2021, taking the total Vancouver headcount to 1700 and over 3700 employees in total across Canada. The additional recruitment will focus on creating applications for Azure platform, Microsoft Office, OneDrive, Web Experiences and Intelligent Communications.
Microsoft already has an impressive cloud footprint in the country with two local data center regions and presence of Azure Availability Zones.
Digital Transformation Bodes Well For Azure
Business enterprises, worldwide, were rapidly migrating their critical workloads to cloud environments even before the coronavirus crisis. Migration to cloud offers enterprises improved scalability, swift deployment, cost efficiency and greater security. The pandemic only accelerated this shift owing to remote work, online learning and telehealth services’ trends.
Per a Mordor Intelligence report,
the worldwide cloud migration services’ market is expected to witness a CAGR of 28.89% between 2021 and 2026. For cloud service providers like Microsoft, this underscores massive revenue growth opportunity.
Microsoft’s Azure is one of the major players in the cloud space, only trailing behind
Amazon
’s
AMZN
Amazon Web Services (“AWS”).
Per a Canalys Report
, cloud infrastructure services spending for the fourth quarter of 2020 stood at $39.9 billion, up 32% year over year. AWS along with Azure accounted for more than 50% of the market share. AWS’ share was 31% of the total spending on cloud infrastructure services, while Microsoft Azure’s share was 20%.
Alphabet
’s
GOOGL
Google Cloud and
Alibaba
’s
BABA
cloud services occupied the third and the fourth spots with 7% and 6% shares, respectively, added the report.
In the last reported quarter,
Microsoft’s Intelligent Cloud segment (which includes server, and enterprise products and services) posted revenues of $14.601 billion, up 23% year over year.
Server product and cloud services revenues improved 26% year over year. The high point was Azure’s revenues, which jumped 50% year over year, driven by strong growth in consumption-based business and recovery across industries.
Further, Microsoft is rapidly increasing Azure data center regions to strengthen its competitive positioning against AWS. The company boasts more than 60 announced Azure data center regions across the globe including Austria, Brazil, Greece and Taiwan.
However, Microsoft needs to watch out for increasing competition in the cloud space from both small and large services providers.
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