According to reporting by Russian news site Kommersant the project started in March 2018 when Huawei leased 80 racks in Moscow for localization services, but the company has quickly expanded to 200 racks and expects to be requiring 500 racks by the end of the year.

Huawei’s contactless payment service Huawei Pay will go live in Russia in the first quarter of 2019 so it will be necessary for the company to localise its data if it wants comply with Russian data laws. Russia’s data sovereignty laws require that data generated by Russian citizens must stay within the country’s borders.

The company says it is aiming to become a “top three player” in the Russian cloud solutions market over the next three years. Arthur Pärn, director of solutions for Huawei Cloud in Russia, said the company has already launched 22 cloud services for different customers in Russia as well as investing tens of millions of dollars in the country.

He said: “We have already entered into a licensing agreement with Microsoft, we are working on solutions with other vendors to provide software from our cloud, and we are also considering partnerships with operators in order to give them the opportunity to resell our cloud.”

Tencent, one of China’s largest Internet holdings, developing PlayerUnknown’s Battlegrounds and League of Legends games, deployed more than 600 equipment racks at IXcellerate site in Moscow to work on data localization and provide cloud services in Russia.