The demand for data center services in Germany is growing, but the country’s tough data protection rules are making it tough for cloud based businesses, according to a report from DCD Intelligence - which is free to paying delegates at our DCD at CeBIT event next week. 

Hard-hitting regulation has helped build trust in German service providers and strengthened the local data center market - but it has also prevented the emergence of large cloud-based businesses, with a notable exception of software-as-a-service giant SAP. DCDi estimates there are 2.65 million square meters of data center “white space” in Germany, representing seven percent of the global total. Even though Germany is the largest national economy in Europe, it is trailing the UK by about 150,000 sq m.

The new DCDi briefing reveals the impact of German policy on the cloud and data center industry - and is being delivered as DatacenterDynamics prepares to welcome Europe’s data center industry to Hall 12 of Europe’s biggest IT event. We look forward to meeting European data center people in a new venue (for us), and every paying delegate will get a copy of this report. 

Bundesdatenschutzgesetz

In 1995, European Union adopted the Data Protection Directive – a document outlining standards for the collection, use, storage and processing of digital information. The choice of how to enforce the directive was left to individual member states – and Germany had an easier time than most.

The country has a long history of data-related legislation: it passed the original data protection law – the Bundesdatenschutzgesetz [Federal Data Protection Act] - way back in 1970, making it the first law of this kind in the world.

This year, the EU is expected to approve an updated version of the directive, which will apply to all union members regardless of local laws – something that wouldn’t concern Germany, but could put more pressure on countries like the Netherlands and the UK.

DCDi research suggests that strict regulation has prevented Europe from spawning large ‘cloud native’ businesses - 10 of the world’s top 15 Internet destinations are run by US-controlled companies, with the other five based in China.

Now, these US-controlled companies are coming to Germany to comply with European rules: for example Amazon and IBM have recently chosen to locate their facilities in Frankfurt – the home of Deutche Borse and the financial heart of the country.

The demand for outsourced capacity in Germany grew 11.1 percent in 2015, compared with 1.2 percent growth in user-operated floor space and 2.9 percent growth in overall data center capacity.

According to DCDi, these figures demonstrate pent-up demand within the country for services that outsourcing providers such as Amazon and Microsoft – and German firms like Deutsche Telekom, which is looking to build “German Cloud” facilities, as well as other European leaders, such as Atos and Cap Gemini – can provide to the German business community.

Purchase the full industry briefing here…

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And of course, all of the current DCDi subscribers will receive the briefing with their regular intelligence package.