Microsoft Looks for Place in China Cloud 微软投身中国云计算大潮

China is clearly excited about the prospect of cloud computing, as evidenced by the steady stream of big names like Alibaba, Huawei and Shanda (Nasdaq: SNDA) that have announced initiatives in the space this year. Now even Microsoft (Nasdaq: MSFT) is trying to get in on the act, announcing a major new cloud computing campaign for China. Whether any of these initiatives will ultimately work is another question, however, as China has yet to prove that it can lead in any major new technology like this. First let’s look at Microsoft’s latest initiative, which will see it build a cloud platform and trading center in the interior city of Chongqing. (English article) This comes just days after Chinese media also reported the NDRC, China’s state planner, had reportedly distributed about $100 million in subsidies for cloud-based initiatives. (English article) Since foreign companies are usually banned from investing in telecoms infrastructure like the kind necessary for cloud computing, Microsoft’s move looks designed to try and cash in on the trend from another angle, in this case from R&D that should enable it to work with other infrastructure developers. Huawei said earlier this year it was also holding out big hopes for the cloud (previous post), and Alibaba is placing a big bet on the technology through its Alicloud unit. With so much state support and some of the country’s biggest tech names behind this cloud push, perhaps one or two companies may eventually find a bit of success in the space, especially if they can team with big foreign names like Microsoft that have stronger technology. But as China has often shown in the past, it takes more than money and state directives to become a leader in a complex new area like the cloud, and I suspect that many of these initiatives will ultimately end up as failures, as major Western players ultimately develop the technology that takes cloud computing from the laboratory to the real world.

Bottom line: China’s aim to be a leader in cloud computing will produce lackluster to poor results due to its lack of experience in commercializing new technologies.

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