Microsoft Corporation Opens Up Local Data Centers In Germany Amidst Privacy Woes

Microsoft has moved to dispel European mistrust of U.S.-operated cloud services by announcing a plan to offer cloud services, including Azure, Office 365 and Dynamics CRM Online, from data centers in Germany that are also operated by a third party company – in a so called trustee model. With the addition of two new data centres in the UK, Microsoft can offer its cloud applications such as Office 365 and Azure to UK companies and keep their data in UK jurisdiction.

“Microsoft’s mission is to empower every person and every individual on the planet to achieve more”, said Microsoft CEO Satya Nadella. Speaking in Berlin on Wednesday, Microsoft Chief Satya Nadella – who sees the cloud as central to the company’s future – said the new data centers were created to ensure that clients’ data remains in Germany. They will be unusual in that the control over data will not be Microsoft’s but Deutsche Telekom and T-Systems subsidiary, which will act as the trustee of the data for the Microsoft customers. Microsoft will not have access to any data without first receiving the permission of the customers or of the data trustee.

At the same time, Microsoft’s move could have a big ripple effect on the whole industry, forcing other cloud companies to enforce new privacy policies to protect their customers’ data from US surveillance.

Like AWS, Microsoft divides its worldwide network of data centers into clusters, or regions.

In the wake of the Court of Justice of the European Union shredding the longstanding Safe Harbor agreement, American tech companies need to come up with a new way to comply with European data protection laws.

Roll-out planned to begin in 2016Availability of services is anticipated to begin in the second half of the year 2016.

Lest there be any doubt about Microsoft’s commitment to its cloud services products, the company has just announced that it would be expanding its offerings to include the United Kingdom.

Since former National Security Agency contractor Edward Snowden accused US authorities of carrying out widespread surveillance, Deutsche Telekom has rolled out a number of products aimed at protecting users from espionage and eavesdropping, including encrypted email, secure smartphones and German data centers.

Microsoft said 83% of German businesses expect their cloud provider to operate data centers in Germany, according to a study by German business group Bitkom. Services will be available to customers in Germany, the European Union and the EFTA. That law never passed, but this effort on the part of Microsoft echoes the attempts of other US tech companies to mollify the fears of various countries – notably important markets like Germany’s – in order to avoid investigation and maintain its business prowess.