The going live this week of Microsoft’s two Canadian data centres opens up significant opportunities for both Microsoft – and its channel partners.
The long-awaited event finally became reality this week. Eleven months after initially being announced last year with great fanfare, and two months after a limited operational preview became available, Microsoft’s two new Canadian data centres have gone live. For Microsoft, it’s a very big deal, with both Azure and Office 365 immediately available now to customers in Canada from a cloud based in Canada. A third offering, Dynamics CRM Online, is scheduled for availability by September. For Microsoft’s Canadian partners, it’s a very big deal as well.
“For us as a subsidiary, this is a real landmark announcement,” said Jean Cheng, Solutions Executive – Public Sector Cloud Programs, Microsoft Canada. “This is part of our global compute fabric, brought to Canada as near-shore commodity-priced compute capacity on demand. Every Microsoft partner in Canada now has a data centre in their pocket.”
The ability of cloud to reduce risk and democratize opportunity has become so broadly accepted today that it is no longer a case that needs to be demonstrated – something that was not the case even several years back.
“On-demand commodity price capacity is where it starts,” Cheng said. “Infrastructure is expensive and carried risks of execution, time, and money. You have to provision for peak demand, and if you miscalculate, you are in danger with capacity issues. This announcement changes the game because it takes the majority of that infrastructure provisioning and risk off the table.”
Azure had been available in Canada before of course – just not through Canadian data centres – and the data sovereignty argument in Canada has been a complex one historically. Microsoft had been on the other side for several years, pointing out (correctly) that unlike in some geos, no federal regulations required Canadian-hosted clouds for Canadian content, even regulated content. What ultimately led Microsoft to reverse its position seems largely to have been response to customer choice, as well as the growth of the cloud and Microsoft’s own growing investment in Azure. While insufficient numbers of customers five years ago were sufficiently concerned about data sovereignty to demand it, that pendulum had shifted.
“In Canada there are very few restrictions on storing data outside Canadian – basically laws in Nova Scotia and B.C. that restricts certain types of personally identifiable information from leaving,” Cheng said. “A lot has been perception. It hasn’t been hard barriers, but more political, and psychological, and that is only going to grow in Canada.”
Cheng indicated that the operational preview available over the last two months showed massive enthusiasm for the Canadian cloud.
“The Canadian preview was the most successful one Microsoft has had to date, with hundreds of customers and partners subscribed,” he said. “We saw lots of video and storage based capabilities and services utilized. One organization staged an anti-virus simulation, which recreated all their key LOB systems to simulate this in the cloud. A retailer used the private preview as a production staging environment to do things that wouldn’t have been done in the past because it wasn’t feasible before to set up the infrastructure to power these things.”
Paul Franc, VP and GM of Markham ON-based Microsoft partner DMTI Spatial, which focuses on location intelligence and whose technology is commonly used in many Canadian geolocation services, said that locating the data centres in Canada will be a major plus for their business.
“We were reselling Azure before, through the U.S., because we liked to use it to develop our product on,” he said. “But we really were using Azure in the U.S. out of necessity. We tie into critical workflows, where data privacy is very important. For example, over $800 billion in Canadian insured mortgages are validated through us. Without the data centres in Canada, we had to produce some hybrid solutions to handle this. The Canadian data centres will let us take the next step forward.”
Franc, who has worked at other Platform-as-a-service companies and has seen this segment change as it moved from being application-centric to more of an enterprise-type architecture, said that these changes make Canadian-resident data more important.
“With this transition, it’s more and more important that data residency is maintained, and the Canadian data centres are an important investment Microsoft needed to make,” he said.
Franc indicated several other ways DMTI expects to benefit from the Canadian Azure launch, which they had been tracking for some time, including betaing some of their own offerings in the preview.
“Our next level of growth involves how best to roll out our new products and take them quicker to market given that there can be elongated cycles as far as being validated,” he said. “Azure will help us change that. Also, location intelligence changes constantly, and our engineers add thousands of addresses monthly. Azure will help us get them to customers faster. As a midsize company who sells to larger organizations, Azure also brings us a lot more credibility, so we can sell that in addition to our product and expertise.”
With the Canadian datacentres in place, Azure is now available in 24 regions globally, more than any other cloud provider, supported by a $USD 15 billion investment in global datacentre infrastructure.