Microsoft Rolling Out Azure Cloud To China, A Deal Only The Chinese Government Can Love

Microsoft has made a deal with China to offer Windows Azure in the country. The deal is ballyhooed as a landmark agreement but, at its core, represents something that only the Chinese government can love.

The agreement with the municipality of Shanghai shows how China will begin rolling out more cloud services to China. That’s further reflected in a deal to license Microsoft technologies to 21Vianet, which will work with regional providers to provide Windows Azure services to local datacenters. 21Vianet bills itself as the largest carrier-neutral Internet data center services provider in China.

Cloudcamp Co-Founder Reuven Cohen has spent a good part of the past few years in China. He recently sold his company, Enomaly, to Virtustream, a provider of software and services for enterprise customers extending to the cloud.  He said to me in an email today that the Microsoft deal represents all that is wrong with the cloud computing and Internet business scene today in the People’s Republic of China (PRC).

What they are really saying is it meets the demands of the Chinese government. The reality is Microsoft has ‘most likely’ had to agree to provide core Azure source code and full unfettered access to any Azure user data and traffic hosted in China.

Cohen makes the point that to do business in China you have to create a series of “rather ridiculous” joint ventures or exclusive licensing deals with local municipalities to have any chance of succeeding:

This doesn’t even begin to describe the convoluted series of hoops that local Chinese companies that may want to use the service will need to jump through to actually use it. Yes, Please fill out a Chinese only language forms, sign on dotted line, mail, on paper no less, and this is just to get started.

What’s striking is how Microsoft couches its news — by wrapping it with all the marketing language that comes with the cloud: It’s good for customers — blah, blah, blah. Microsoft did not reply to requests for comment in time for this post to be published.

The Microsoft deal has no real value except for giving Microsoft a beachhead in China. There is nothing here that says outside businesses can use Azure as an endpoint for conducting business. That leaves the China market exclusively and another example of a quarantined and separated business venture within the great firewall.

Let’s be real here. Microsoft has made a deal with the Chinese government and the ones to benefit are not the users at all but the Chinese powers that control how technology is distributed, managed and surveilled in the PRC.