By Alain Crozier, Microsoft Corporate Vice President, Chairman and CEO of Greater China Region
Things are changing fast across the global economy and organizations almost everywhere are picking up the pace of their digital transformation journeys. Many are racing to build their own tech intensity capabilities so they can create proprietary technology and widen their competitive advantages.
CEO Satya Nadella singled out this challenge in his keynote at our recent Microsoft Ignite 2021 conference. And later at Ignite China 2021, I identified tech intensity as a top priority for companies in China.
Its economy is recovering from the effects of pandemic faster than much of the world. China was the only major economy to grow in 2020 (+2.3% GDP) and it has a 6% GDP growth target for 2021.
According to surveys by the EU, Japan and US chambers of commerce, most multinational companies (MNCs) are optimistic about the Chinese market’s growth and business opportunity.
Business leaders know they must transform their operations to ensure that growth is productive and sustainable.
Research by IDC and Microsoft found that in the first six months following the outbreak, 63% of organizations in China said they were intending to speed up the digitalization of their products, services, payments, and more, including ecommerce and automation. And in an ISACA study, 91% of business leaders in China said digital transformation was a key way to spark innovation and create efficiencies for their organizations.
These findings support what we have learned through conversations with customers, and analysts. From our own internal research, we’ve identified five trends in the post-pandemic China market:
- Remote collaboration and productivity is needed across organizations and throughout value chains..
- Enhanced privacy and security are needed as organizations increasing rely on technology and remote operations.
- An accelerated deployment of intelligent robotic process automation and low code technologies is needed to keep up with re-shaping workflows and customer service demands.
- AI-driven predictive analytics and digital twins will be used for data modeling, risk assessment and execution of supply chains in manufacturing, as well as in education and medicine.
- And future product and process development and introduction will be accelerated by digital twins, mixed reality, specialized compute and digital feedback loops.
Behind these powerful transformations, we see an enormous need from customers of various sizes and in various industries. There are great opportunities for our industry and ecosystem both in China and globally.
Based on our nearly 30 years of experience in China, we’re clear on one thing: While technology is important, it’s really about the way technology empowers our customers.
Here are six key points business decision makers (BDMs) need to consider when moving their operations to the cloud:
- The capacity and reach of cloud solutions in China and around the globe. The cloud market in China is expected to reach 300 billion RMB (around US$46 Billion) in 2023. Nowadays, companies are not thinking of the cloud as a cost-efficient data center service, but rather as a reliable business partner that helps them to grow and extend to an even bigger market. This is true for MNCs coming to China as well as Chinese companies going global. By cooperating with our local partner, 21Vianet, essential Microsoft cloud services – including Azure Microsoft Office 365, Dynamics 365 and Power Platform – are compliantly available in China. We will announce a new datacenter region for China next Spring, which will double our capacity in the country. This will help more MNCs transplant their IT systems and business applications to China easily and securely, just like Coca-Cola, Walmart, Starbucks, and ThysenKrubb did for years. With the launch of SAP S4/HANA cloud on Azure China, our strategic cooperation with SAP will help more enterprises to ‘rise with cloud’.
- The flexibility and hybrid design. Cloud provides flexibility for organizations to maximize their existing on-premises investments and develop an effective hybrid and multi-cloud approach. Vanke, one of China’s largest real estate enterprises, has been working with Microsoft to construct its next generation hyper-converged hybrid data center. Through cooperation with Lenovo, Dell and Intel, Azure Stack HCI hybrid solution will be available in China soon. And Azure Arc, which simplifies governance and management by delivering a consistent multi-cloud and on-premises management platform, will also be available this year.
- The capabilities of the data platform. Cloud platforms should empower companies to release the potential that is hidden in data and reveal insights and opportunities to transform their business. We see a growing demand for cloud-based data analytics from our customers. By adopting data and mixed reality services running on Azure, Xiangya Hospital at the Central South University is using HoloLens 2 to boost accuracy and lessen risk in orthopedic surgery. Azure Databricks is available now to help organizations efficiently and cooperatively build AI solutions and extract intelligence from PB-scale datasets. Meanwhile, Azure Synapse Analytics services are open for preview in China.
- Trust by design. Reliability, compliance and security are more critical than ever as we work in a hybrid and technology-intense world. Microsoft offers integrated end-to-end capabilities across identity, security and management as well as compliance. Microsoft is also an industry leader in compliance. Our cloud has the most comprehensive compliance certification portfolio to date with over 90 compliance offerings, including meeting the requirements of Europe’s General Data Protection Regulation (GDPR). The world’s leading automotive interiors provider, Yanfeng Automotive has 240 production bases and 55,000 employees around the world. It uses Microsoft 365’s Enterprise Mobility and Security (EMS) suite to secure data privacy and maintain compliance globally. The EMS suite is now available in China.
- A seamless, integrated and consistent customer experience. Consistency in architecture, development platform, and performance is a top priority for MNCs when they are planning to deploy IT as part of extending their business to new international markets. Microsoft cloud services operated by 21Vianet in China are physically separated instances but are built on the same cloud technical base as its global peers. The consistent architecture across China and global markets makes it easy, efficient and secure for MNCs to transplant their IT systems and business applications to China or vice versa. The China-ASEAN Cross-Border Medical Cooperation Platform constructed by the First Affiliated Hospital of Guangxi Medical University came into use last October and is running on Microsoft Cloud operated in Hongkong region.
- An ecosystem that enables and empowers innovation. The pandemic is accelerating digital transformation quicker than expected. And organizations are eager to innovate with agility for resilience and recovery. At Microsoft, we are committed to helping our customers achieve that. With strong R&D capabilities from Microsoft Research Asia (MSRA), Software Technology Center at Asia (STCA) and professional customer services from Microsoft Consulting Services (MCS), Microsoft can transform cloud innovation into business applications to meet the needs of customers. With 9,000+ System Integrator (SI) and Managed Service Provider (MSP) partners strong technical capabilities, Microsoft is helping companies, like Decathlon and General Mills, ignite local innovation in China and spread the impact to global markets.
Microsoft’s technologies, platforms, services, and our partner ecosystem have already enabled thousands of local and foreign companies in their digital transformation journeys. Looking toward the future, we’re investing even more in our innovation capabilities by building industry clouds for manufacturing, retail, financial services, non-government organizations and healthcare. We are also focusing on talent development and workforce skilling.
Everything we do in China, is centered around our mission: To empower every person and every organization on the planet to achieve more.