Microsoft Corp will step up efforts to expand its cloud computing business in China as local enterprises are embracing new technologies to boost productivity, a top executive of the US software giant said on Tuesday.

Ralph Haupter, CEO of Microsoft in China, said despite China's economic slowdown, the company is seeing an increasing demand for its cloud service Microsoft Azure.

"Though the GDP growth is slowing down, Chinese companies still need to focus on three points to remain relevant and competitive: innovation, productivity and the return of investments. And cloud computing can help in all of the above three aspects," he added.

The company said on Tuesday it has more than 65,000 corporate customers for Azure in China, up from about 50,000 a year ago. The service was launched in the country just two years ago.

And Office 365, the cloud version of its popular Office software, has attracted about 10,000 Chinese corporate customers, who have bought more than 1 million suits of Office 365.

"We will focus on manufacturing, retail, automotive, media and other industries to further expand market share," Haupter said. He declined to offer more details.

Earlier this month, Microsoft lowered the price for part of its cloud computing services amid intensifying competition from rivals like Amazon.com Inc and China's homegrown internet heavyweights Alibaba Group Holding Ltd and Tencent Holdings Ltd.

The US company is trying to transform from a traditional software vendor into a service provider by boosting its cloud computing capabilities.

Cloud computing offers customers shared access to software or the processing power of vendors, which they can use over the internet. The model saves clients the cost of running their own information technology department, and they will only have to pay for the resources they use, like utility bills.

According to the research firm Gartner Inc, the global cloud computing industry will grow nearly 17 percent to $204 billion this year and it is likely to hit $312 billion in 2019.

Ji Yanhang, an analyst at Beijing-based internet consultancy Analysys International, said the Chinese cloud market is still in its infancy, but it is already a fiercely competitive sector.

"China's national strategies, such as boosting high-end manufacturing, will increase demand for cloud services in the coming years."

But foreign companies are facing more difficulties than their Chinese counterparts as some government bodies and State-owned enterprises are abandoning overseas technology for domestically made alternatives due to information security concerns, Ji added.

In September, Microsoft and its Chinese cloud computing partner 21Vianet Group Inc set up a joint venture with the State-owned information technology company Unisplendour Corp Ltd, aiming to break into the government and SOE market.

Haupter said: "So far, the partnership is going well. Since September, we have inked deals with (governments in) more than 10 cities and provinces in China. More progress can be expected pretty soon."

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