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Microsoft’s Cloud Is Expanding to Switzerland and the Middle East

Microsoft plans to open new data center facilities in Switzerland and the Middle East, specifically Abu Dhabi and Dubai.

The technology giant revealed the new data center projects, part of its Azure cloud computing business, on Wednesday but did not say when they would be ready to use.

The company also said that a cloud computing data center in France is now open to take business. Microsoft first said it would open a France data center in October, 2016. Businesses operating in France now have the option to buy on-demand computing resources from Microsoft’s Azure unit and also subscribe to its Office 365 workplace software, delivered from the cloud data center. The company’s Dynamics 365 customer relationship management software will be available in early 2019.

Additionally, Microsoft said it would open new cloud data centers in Germany to better serve customers in the country, confirming earlier reports by German news outlets WirtschaftsWoche and Handelsblatt. Microsoft (MSFT) did not say how much the German data deals cost, but the local news reports said it would cost Microsoft the equivalent of $120 million.

The new data centers underscores how cloud computing giants like Amazon (AMZN), Microsoft, Google (GOOG), and IBM (IBM) are spending billions of dollars building out their infrastructure across the world so they can sell their technologies to non-U.S. customers.

Oracle (ORCL), which is a making a big cloud computing push, also said in February that it plans to build data centers in countries like China, India, Japan, Switzerland, and Saudi Arabia.

Many international companies are precluded from storing data outside their countries because of regional data sovereignty laws. As a result, cloud-computing companies are increasingly building facilities in these countries to better serve customers there and abide by local laws.

“What our customers appreciate is choice,” said Microsoft Azure’s head of global infrastructure Tom Keane in an interview. “There are absolutely some customers that value data residency and it is essential.”

The types of international companies that want to store data within their country while using cloud services tend to be heavily regulated companies like insurance providers, financial services firms, and healthcare companies, he explained.

Keane declined to comment on whether Microsoft is building entirely new data centers in its newly announced regions or is leasing existing data center facilities to sell its cloud services.

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It can be cheaper and easier to deal with existing regulatory requirements if cloud-computing companies choose to lease and operate in existing data center facilities while also partnering with local companies. The tradeoff is that they don’t control the entire data centers and can’t optimize them to be as power efficient as the massive data center facilities companies like Google, Amazon, and Microsoft operate in the U.S.

Keane also declined to talk about future data center locations, only to say that they would be built in places where Microsoft likely sees big business opportunities. That means, data center facilities in far-flung locations like Antarctica are likely not coming anytime soon.

“If it’s economically viable, I’ll be happy to talk to you,” Keane said when asked about possible Antarctica or Arctic data centers.