Microsoft ‘To Open Two German Data Centres’

Microsoft is reportedly set to expand its cloud offerings for the German market with plans to open two new data centres in that country at a cost of more than 100m euros (£87m).

The software giant’s Azure cloud service is locked in a fierce battle with rivals Amazon Web Services and Google Cloud, and the Microsoft-owned data centres would help satisfy German concerns about data staying within their country’s borders.

Germany is notoriously sensitive when it comes to privacy issues and the country has strict laws governing such matters. Cloud uptake in Germany has until now been relatively weak, according to the reports in German news publications WirtschaftsWoche and Handelsblatt.

German facilities

It should be noted that since 2015 Microsoft has had a partnership with Deutsche Telekom that enables it to offer German-based cloud services from two facilities in the cities of Magdeburg and Frankfurt.

Under the terms of that deal, Deutsche Telekom acts as German data trustee, and controls and oversees all access to customer data.

These German cloud services are also understood to be hosted in data centres elsewhere in Europe, namely in Dublin and Amsterdam.

The new data centres would give Microsoft more control over its offerings in the country.

It is not clear at this stage whether Microsoft plans to open bespoke data centres or new facilities opened in partnership with another party. It is also not clear whether Microsoft’s partnership with Deutsche Telekom would also continue alongside the new offerings.

The reports state that demand for the German cloud had been weak because of higher pricing and a lack of flexibility in moving data. That may make it difficult for Microsoft to make a return on its investment.

Sabine Bendiek, chief executive of Microsoft Germany, reportedly noted that companies can only access Microsoft’s cloud-based productivity tools if they are hosted in German data centres, due to the country’s data protection and compliance requirements.

A Microsoft spokesman told Reuters the company endeavoured to allow customers to access services via either German or international data centres.

Azure expansion

“Many customers with particularly sensitive needs, for example in the public sector, prefer our German cloud offering,” the spokesman told Reuters in an emailed response. “We give customers the choice.”

Microsoft has been opening data centre facilities around the world to expand the reach of its Azure cloud service.

Last year for example Redmond opened two data centres in South Africa, its first data centre expansion into Africa itself.

Those two facilities (in Johannesburg and Cape Town) are expected to be online in 2018.

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