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Welcome in the German sky, Amazon, Google and Microsoft!

on Thursday, 30 October 2014. Posted in Trend Monitoring, Germany

Germany's need for security in the digital world creates chances for foreign IT companies

CloudsWhen the sky over Germany is becoming increasingly cloudy these days this has only in part to do with the arrival of fall. The main reason lies in a new trend on the IT market: more and more US companies are opening data center in Germany to offer local cloud services to potential customers in Germany.

Enterprises such as Google, Oracle, Microsoft or Hewlett-Packard have already started establishing new computer centers in Germany or other European countries. Now the online retailing giant Amazon also announced that it will be opening a data center in Frankfurt for its Web Services unit that rents computing power and storage to consumers, businesses and government agencies.

Cloud computing as a standard

Cloud services are very popular these days when people are working more and more in networks and on the move. Many companies prefer storing their data or running programs on cloud computers rather than on their own equipment to be able to react appropriately to their respective requirements and hence be more efficient.

According to the survey "Cloud Monitor 2014" by the auditors of KMPG and BITKOM, the Federal Association for Information Technology, Telecommunications, and New Media, cloud computing in Germany already is the standard for larger companies with 2000 or more employees.

NSA affair damaged trust in cloud services in the European Union

But since the revelations of Edward Snowden, the fear of US governmental agencies spying out data has tremendously grown in the European Union and the location of data centers has become a big issue. The "Cloud Monitor" study has also shown that the NSA affair has put a damper to the growth of cloud computing. Companies such as Google, Microsoft and now Amazon have acknowledged this European and especially German anxiety and react accordingly by building data centers here.

Companies in Germany don't want their data stored at a server somewhere in the world but "at home" - somewhere close by where it feels safer. They want to know where their information is and they want the German - or at least European - law to be applied especially when it comes to data protection issues.

Politics have also recognized this high demand for security on the Internet. In the so called digital agenda which has been passed in August 2014 by the German Federal Parliament, one of the core issues besides the broadband deployment and the encouragement of innovative ideas and foundation of companies is the improvement of security on the internet. A concrete guideline for acting is yet to be worked out, but there definitely is governmental support for this issue and a general interest that the trust in cloud computing services will be restored.

Chance for foreign IT companies to enter the market

Companies that offer computer center related products will profit from this trend, which apparently is just starting.

"This is the perfect time for foreign IT companies that offer computer center related products to enter the German market", says Bernd Hoeck, founder of bloodsugarmagic and go-to-market expert. "Everybody is talking about cloud computing and security - there is a huge potential for companies having something to offer in this area. And the market will still be growing."

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