Microsoft Corp. /zigman2/quotes/207732364/composite MSFT -0.23% is teaming up with Elon Musk's SpaceX as it takes on Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +0.25% in cloud-computing for space customers, the Wall Street Journal reported . Microsoft will offer services using low-orbit spacecraft being developed by SpaceX and traditional satellite fleets circling the earth at higher altitudes, the paper reported. The initiative, which is targeting commercial and government space businesses, launched on Tuesday three months after Amazon Web Services disclosed its space plans. Microsoft will also work with Luxembourg's SES SA /zigman2/quotes/202472664/delayed FR:SESG +0.35% , which operates a network of larger satellites under the brand O3b. Microsoft is "focused deeply on governments and defense," Tom Keane, a corporate vice president told WSJ. The space effort, he said, provides an opportunity "to bring commercial technology and innovation to the military." Microsoft shares were up 1.2% premarket and have gained 36% in the year to date, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.03% has lost 1.2%.