Microsoft plans to set up an Innovation Center in Shanghai, to lead research into cloud computing.

It's Internet-based computing, where resources, software and information are provided to computers and other devices on demand like an electricity grid. The center in China will be a first.

At a cloud computing summit today, Microsoft said work at the innovation center is already under way in Minhang District. Nearly 400 scientists have started research work there.

This not only indicates the Microsoft cloud computer strategy is turning into a reality in China, but also means the cloud plan in Shanghai is being carried out. The center is expected to open by the end of this year.

Cloud computing is Internet-based computing, whereby resources, software and information are provided to computers and other devices on demand. 12 cloud projects with investments topping 3 billion yuan are planned for the city.

Shao Zhiqing, Deputy Director, Shanghai Economy & Information Comm., said, "I think on the one hand we should pay special attention to independent innovation. At the same time we should also introduce international companies to Shanghai to spur the development of the cloud computer industry. The next step is, we will carry out profound cooperation with Microsoft. We hope to co-act on the areas in public service, application software development, and industrial solutions."

The Cloud computer plan has been listed as one of the major projects for national strategy on rising industries.

This July, the Shanghai government established a Yunhai program. The goal is to build the first cloud computer center in the Asia-pacific region.

According to the program, about 10 computer technology and service enterprises will be established in Shanghai within three years, and their sales market will reach 100 million Yuan perspectively.

There will be 10 model platforms to service in the areas of city management, industrial development, and services in mid-and-small companies. These are expected to drive some 100 billion Yuan in operating income in the Information service industry, and attract more than a thousand high-end cloud computer workers.

In order to satisfy those goals in a short period, the government is willing to cooperate with partners around the world, as their first step.