Microsoft to Launch Much Awaited Cloud Server Farm in Israel in 2021

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Microsoft CEO Satya Nadella delivers the keynote address at Build, the company's annual conference for software developers,  in Seattle, on Monday, May 7, 2018. 
Microsoft CEO Satya Nadella delivers the keynote address at Build, the company's annual conference for software developers,  in Seattle, on Monday, May 7, 2018. Credit: Elaine Thompson,AP

Microsoft intends to create a local server farm in Israel for its cloud customers, the technology giant announced on Wednesday. The plan to create a server region in Israel is likely to bring an investment of hundreds of millions of dollars.

The server farm is slated to launch in 2021, Microsoft announced.

The step is intended to provide smart, secure cloud services via the company’s Israeli data center, Microsoft stated. After this investment, Microsoft will have 56 server regions in 21 countries around the world, it added.

Initially, the Israeli region will offer infrastructure for Microsoft’s Azure cloud series. Later it will add support for the company’s Office 365 services.

This is good news primarily for Israel’s government, which last year launched a project named Nimbus, which entails transferring the government’s IT services to the cloud. This necessitates local cloud servers, so that government data does not leave Israel’s borders. Israel’s government alone intends to invest some 500 million shekels ($144 million) in cloud computing services, and it’s likely that this was one of Microsoft’s considerations in opening a local server farm.

The local cloud servers are also likely to serve Israel’s financial, health and security industries, all of which prefer keeping their data within Israel’s borders.

This is also good news for Israel’s startup industry, which will be able to receive Microsoft’s Azure computing services through local services – meaning that their computations and applications would run faster.

The CEO of Microsoft Israel, Ronit Atad, stated, “This is further proof that Microsoft sees Israel as a strategic market. The public sector, the business sector, startups and developers will all enjoy scalable cloud services (meaning they will be capable of handling increased demand - A.Z.)in order to spur innovation and digital transformation.”

Microsoft already has Azure customers in Israel, including Check Point, Bank Hapoalim, Mellanox, Sheba Medical Center, the Tel Aviv municipality, Zim shipping company, JFrog, eToro, Discount Bank, the Israel Electric Corporation, Israel Post and Rafael armament systems.

Another major technology giant, Oracle, has already set up cloud servers in Israel. However, Microsoft is a much more significant player in cloud computing, and is the world’s second largest cloud services provider, after Amazon.

The government had courted international tech giants in a bid to build a local server farm. In February, the Government Procurement Administration announced that it would be inviting bids to provide local cloud computing services for the entire government.

The Israel Defense Forces made a similar announcement that very day.

The government had hoped to lure one of the world’s major tech companies – namely Amazon, Microsoft, Google, IBM or Oracle – to launch a local server farm. Previously, the closest server farms were situated in Europe.

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