Microsoft has spent the past few years engaged in massive expansions of its data centers in the U.S., adding the capacity needed as its Azure business grows. Now it's moving on to Europe, as is Amazon, in what looks to be the next big cloud battleground.
At a company event in Dublin, Ireland, CEO Satya Nadella told an audience that the company is building out its data centers as "a global hyperscale cloud." Microsoft has over 30 regions across all parts of the globe, making sure customers worldwide have access to the cloud. Its next big push will be to open multiple cloud data centers in France, beginning next year. Amazon Web Services (AWS) last week said it plans to do the same.
So far, Microsoft has invested about $3 billion in building cloud data centers in Europe. The company has doubled its European data center capacity over the past year alone, with new data centers in England and Germany and expansions in Ireland, Holland, Austria and Finland. The U.K. and Germany both have Azure services locally, while the U.K. has Office 365 and Germany will get it next year.
That sounds like a lot of data centers in a relatively small geographic location. In the U.S., Microsoft’s data centers are spread out more. But in light of the Edward Snowden revelations of NSA spaying, some nations, Germany in particular, looked at passing laws that required Internet traffic remain within the nation's borders. The NSA was able to spy on foreign nations in part because their internet traffic was often routed out of the country and through the U.S.
Microsoft said as much in its announcement of the data center investment by stating, "The collective investments … enable Microsoft to meet anticipated customer demand in Europe and offer European customers greater ability to digitally transform their organizations through the cloud by meeting their security and compliance needs while understanding where their data resides."
Also, the German data center has a new model for Europe where access to customer data is controlled by a data trustee, T-Systems International, an independent German company and subsidiary of Deutsche Telekom. So, Microsoft clearly heard the anger of the European governments over the NSA spying and is reacting accordingly.
All of that should help differentiate it from AWS, which is very dominant in Europe.