Supply chain
Microsoft sees Taiwan as key cloud computing development center
Marvin Ma, Taipei; Adam Hwang, DIGITIMES
Friday 6 November 2009

One key reason that is seldom discussed as to why Microsoft has been able to enjoy continued successful with its Windows operating system in the PC and mobile device market is that the software giant has always sought to maintain close partnerships with hardware OEMs, especially makers in Taiwan.

It appears that Microsoft is using this same business model to promote its cloud computing initiatives. Microsoft has announced that it is cooperating with the Taiwan government and Taiwan's largest telecom carrier Chunghwa Telecom (CHT) to develop cloud computing technologies in Taiwan, and during his recent visit to Taiwan, Microsoft CEO Steve Ballmer was quick to point out that Microsoft's Taiwan partners will play a key role in the future development of hardware and software.

Looking at Microsoft's partnership with CHT, sufficient Internet infrastructure with stable broadband networks is crucial to developing cloud computing applications, and in this context telecom carriers play the key role of being the channel to provide cloud computing services. Microsoft's cooperation with CHT reflects its strategy of setting up close partnership with telecom carriers.

As for its partnership with Taiwan's government, Microsoft and Taiwan's Ministry of Economic Affairs will jointly invest to establish a Software and Service Excellence Center in Taipei, with focus on R&D of applications of cloud computing technologies. This reveals Microsoft's intention of establishing a hardware supporting system to realize cloud computing applications.

While these two announcements demonstrate Microsoft's continued support of its Taiwan partners, they also signify a shift in Microsoft's focus. In the past, Microsoft has targeted its hardware partners directly. For its cloud computing strategy, it appears that Microsoft is looking to make sure that government support and telecom infrastructure can keep up with the hardware makers.

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