Reflections on Microsoft Cloud entering Finland

Last week, Microsoft in Finland announced the rumor circulating in recent years – Microsoft Cloud would establish a local datacenter presence in Finland. More specifically, in the cities of Espoo and Kirkkonummi. These are close to the capital area (and Helsinki).

Immediately after this announcement, I saw a flurry of social media commentary and news article sharing. Great! I’m super happy with this announcement, but I wanted to sleep over it and reflect on what it means exactly. What will change?

Typically, customers looking at data centers have two things in mind: latency and data residency. Latency is the round-trip for data to travel from your users and services to Azure and back. It’s measured in milliseconds. Data residency then is where your data is physically stored.

Currently, the closest Azure datacenter is in Sweden for any businesses operating in Finland. These two (Sweden Central and Sweden South) are in the process of lighting up and have limited capabilities today. Usually, we choose to use West Europe (in the Netherlands) and North Europe (in Ireland), for they are very stable and have been around since the beginning of time. Latency-wise, West Europe is the best, but Sweden will eventually be much better.

Latency for Finland to Sweden Central is 18-20ms. Latency for West Europe (from Finland) is 33-45ms, and from Finland to North Europe, it’s up to 52ms. All tests are done from Helsinki via Azure Speed.

Customers benefiting from a local datacenter require latency in the single-figures (think Azure Virtual Desktop, for example) and those that need data to be stored within the country’s boundaries (consider financial institutions). Eventually, the Finnish data center will provide a suitable solution for specific workloads and particular requirements for both of these scenarios.

I’ve yet to see a mass migration from West Europe to Sweden data centers, as it isn’t needed – or it isn’t possible due to missing features from the target datacenter. West Europe has been ‘good enough’ to warrant spending days or weeks of migration and potential downtime to get the slightly lower latency. If your data is in Sweden or the Netherlands, you typically do not worry more about either one. They are still outside Finland. Also, based on this summary on Wikipedia, in Sweden, the “[..] law permits the signals intelligence agency, National Defense Radio Establishment, to monitor the content of all cross-border cable-based Internet traffic to combat “external threats” such as terrorism and organized crime.” I’m not the least worried about that usually, but I also have not seen a clear statement from Microsoft regarding this and the Microsoft Cloud investments in Sweden.

Finland, thus, will finally get a local presence with the new announcement – presumably for Azure, Dynamics 365, and Power Platform. Microsoft 365 is slightly different, as it has a sort-of local presence already in Finland due to some historical reasons with the Nokia acquisition back in the day. The news reports for the new data centers stated that there would be three data centers – in two different cities. Unsurprisingly, I saw local citizens already filing motions to avoid the data centers close to their homes.

No schedule was communicated with the news. Permits and zoning are in the process, and considering the usual pace of such projects, I’d estimate we’ll see the first data center light as an Azure location around 2025 to 2026. I’m basing this on estimating that physical building, power, and connectivity take 18 to 24 months. Add the permits and groundwork there, and you’re easily at 36 months. Plus, digging and building in the harsh Finnish winter – which admittedly in recent years has been milder – tends to put limitations when and how you can pour concrete, for example.

In retrospect, nothing essentially changed last week with the announcement. It is excellent news, but before we get more data – and lights turned on in the coming years – it does not affect any projects or deployments in the coming years. I feel the EU sovereign cloud is more critical for this prospect.