Microsoft Launches UK Cloud Data Centres

Microsoft has launched its first UK-based data centres to support cloud services such as Office 365, with the Ministry of Defence and the NHS among its initial customers.

The Redmond company said it is the first overseas provider to establish data centres in the UK, a step that means organisations can deploy cloud services while keeping their data within the country’s borders, a key factor for public-sector and regulated bodies.

MoD cloud shift

Amazon said last year it is also planning UK data centres, but hasn’t yet provided a launch date.

Microsoft said its Azure cloud platofrm and Office 365 cloud-based productivity suite are available now, with Dynamics CRM Online to arrive in the first half of next year.

The data centres are located in London, Durham and Cardiff, Microsoft said.

The MoD, which employs about 250,000 people, will be the most complex IT operation to shift onto Microsoft’s cloud, announcing plans to shift the entire department onto Office 365 within one calendar year.

“This agreement, which is based on Microsoft’s world-class reliability and performance, will allow us to deliver cost-effective, modern and flexible information capabilities,” said MoD chief digital and information officer Mike Stone in a statement.

Initially MoD staff will not be allowed to store classified documents on Microsoft’s cloud, but that restriction could be relaxed over time, Stone said.

NHS ‘trust’

South London and Maudsley NHS Foundation Trust, the country’s largest mental health trust, has also agreed to use Microsoft’s UK data centres, with the organisation saying it “trusts” Microsoft.

Other new customers include Aston Martin, Capita and Rosslyn Analytics, as well as smaller organisations such as independent software vendor Careflow Connect.

Microsoft said its infrastructure is already used by UK organisations including Glasgow City Council, Marks & Spencer, Confused.com, Natural Resources Wales, Pizza Hut Restaurants and Virgin Atlantic.

Some private- and public-sector organisations have balked at storing their sensitive data on third-party systems, but the MoD’s example may help such groups see the cloud as a safe option, according to industry analysts Kable.

“Microsoft has a perfect exemplar to demonstrate the benefits of 365, particularly in the public sector,” said Kable analyst Daniel Jones in a research note. “In return, the MoD has been able to push Microsoft at the highest levels to deliver, for example, providing asynchronous cloud for service delivery on submarines.”

Jones highlighted that the MoD, like other public-sector organisations, has resisted shifting its data infrastructure to any third party, but has had to take a more commercially-minded approach in the face of budget pressures.

Brexit in the background

Microsoft said it expects legal services, banking, utilities and other regulated sectors may be drawn to its UK-based cloud services.

The company’s Office 365 is growing in popularity, but overall its cloud services lag behind those of Amazon, which commanded about 31 percent of the worldwide cloud infrastructure market between April and June, in comparison to Microsoft’s 11 percent, according to Synergy Research.

The British data centres aren’t directly connected with the UK’s exit from the EU, with the MoD having approached Microsoft about the project two years ago, but the shift could spur more UK-based infrastructure, industry observers have suggested.

Amazon recently said it doesn’t expect the change to affect its UK data centre plans.

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