Microsoft’s New Africa Data Centers in a Step in the Right Direction… Not Enough to Catch Up to Amazon

While the world of cloud computing is a huge enterprise, Microsoft isn’t really in the conversation when people discuss the topic. Amazon AWS, IBM, Salesforce, and Google all seem to dominate Microsoft in that area. Except, they don’t. Microsoft actually owns an 11 percent market share in the world of Storage as a Service (SaaS). And that puts them ahead of everyone except Amazon, which owns a 31 percent market share. Microsoft announced that they are opening two mega data centers in Africa, which is a direct push for cloud market share.

Will Microsoft's Plan be Enough to Catch Up to Amazon?

The more storage a computer has, the faster it can operate. But storing information can be expensive, difficult to maintain, and tedious.That’s why most companies choose to outsource storage instead of maintaining servers in house for data. And that’s why Storage as a Service (SaaS) is such big business. In fact, companies (such as Rackspace) are built specifically for data storage. Cloud based storage allows companies to boost storage, networking, computing, databases, and analytics, which explains Microsoft’s latest foray into data centers.

Any edge Microsoft can gain against the competition is huge. Yet, Africa seems like an odd target — especially since no one has focused on Africa’s cloud industry. That industry produced about $243 million in 2016, but is expected to grow 20% in the next 4 years.

Is that enough revenue to catch up to Amazon? Not even close. But every little bit helps. And with Microsoft being first to market out of Microsoft, Amazon, and Alphabet, they get an edge in the African market, which could become quite profitable over the next decade. Those three companies combined to spend $31.5 billion in 2016 on leases and capital expenditures, a major chunk of which went towards cloud investments.

Get to know more about Microsoft with this video from Windows:

Building data centers is a global arms race for these companies, and with Microsoft Corp. (MSFT) being first to a large, new market, traders can expect shares to rise UP.

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