As reported by the BBC, Microsoft has set up data centers in Durham, Cardiff, and London, hoping to begin handling sensitive data that companies might want to keep within the United Kingdom. The UK Ministry of Defence and at least one National Health Service Trust are known to be joining the platform.
As a native Brit with many friends and family working in the public sector, I'm painfully aware of how outdated the government's IT systems are (many of which still rely on Windows XP, sigh). Mike Stone of the MoD reportedly approached Microsoft with the idea of opening UK data centers a couple of years ago, due to the MoD's reliance on Windows XP, outdated applications, and a desire to keep the data within the country.
The UK Ministry of Defence runs some of the most complex IT in the world, and while I doubt (and would hope) the NSA-like GCHQ itself is running on Windows XP, Azure and Office 365 should provide a boost to lower-level but still sensitive office-type scenarios within the sector. Although, the MoD notes that it won't be using Azure to store classified documents, perhaps in part due to the fact the United States government wishes to obtain the right to access Microsoft's data even when it's stored in outside sovereign territories.
Beyond the MoD, Microsoft's UK cloud will also power National Health Services in South London and Maudsley, a social care firm known as Capita, and Careflow Connect, which is a communication tool for health service workers.
Microsoft UK's Nicola Hodson hopes that Azure can also power companies in law, banking, utilities, in addition to other sectors of the UK government.
Microsoft still has a long way to go before it can tackle Amazon Web Service's market share dominance, but this latest development is doubtless a step in the right direction.