Microsoft Building Cloud Data Centers in UK

Echoing last week’s announcement by Amazon of a project to establish its first cloud data centers in the UK, the cloud giant’s chief rival Microsoft said Tuesday it would do the same.

The Redmond, Washington-based software and cloud services company expects to bring online its first cloud data centers in the UK late next year. Microsoft also announced it has completed expansion projects at its two existing European data center locations, in Ireland and Netherlands.

While Microsoft already has customers in the UK that use its cloud services, including the UK’s Ministry of Defense, Pizza Hut Restaurants, and Virgin Atlantic, it has become increasingly important for cloud providers to have physical infrastructure closer to where its customers are located.

One reason may be performance for enterprise applications, as companies rely more and more on cloud services; another reason is growing concern with “data sovereignty,” the idea that laws of a specific jurisdiction govern digital data that’s physically stored within that jurisdiction’s borders.

Data sovereignty is a familiar matter to Microsoft, which since last year has been battling US law enforcement officials in court over access to personal data of a person under investigation stored in the company’s Dublin, Ireland, data center.

The issue of physical location of data has become even more acute since the European Court of Justice ruled last month to annul Safe Harbor, a legal framework that governed the transfer of user data between data centers in Europe and data centers in the US. The ruling has made storing European customers’ data overseas legally more complicated for cloud service providers, making local cloud data centers in Europe more valuable.

Overall, providing customers with a wide variety of location options for their data has become one of the ways for cloud providers to stay competitive. Both Amazon and Microsoft, as well as IBM and Google, spend billions of dollars every year on data center construction around the world as they compete for cloud market share.

Just this September Microsoft announced the launch of three cloud data centers in India, its first in the country.