Cloud computing is a readily available resource for enterprise, but many corporations and governments have been hesitant to make use of third-party services for fear of sensitive information being leaked or stolen. Microsoft has announced that it will be allowing government clients to run Azure cloud technology on private servers under new licensing agreements.

Offering the ability to keep all data local makes Azure significantly more appealing to all levels of government. Amazon already beat Microsoft out of the gate to offer enhanced levels of control over cloud-based services and has secured contracts with the CIA. Microsoft's new option will become available midway through this year.

Storing data locally not only offers theoretically improved security, it also is an issue of compliance. Many government organizations are explicitly forbidden from using traditional cloud services because data cannot be shared with third-parties without going through red tape.

Despite being a cloud-focused service, Azure for government is also able to operate in a fully self-contained bubble where Internet communications are restricted. Microsoft's global infrastructure lead Tom Keane states, "Quite literally we've designed Azure Stack with the scenario of a submarine in mind."

Although Microsoft is adding an important feature that could help attract new clients, it still has a long way to go to catch up to rival Amazon. According to research firm Canalys, Amazon Web Services holds 32 percent of the cloud computing market compared to Microsoft's 14 percent market share for the fourth quarter of 2017. By the end of 2018, cloud computing is expected to be a $74.7 billion market, a 36 percent increase over 2017.