The software giant’s Azure cloud service is locked in a fierce battle with rivals Amazon Web Services and Google Cloud, and the new 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 privacy laws. The media reports state that cloud uptake in Germany until now has been relatively weak.
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 other European data centres, namely in Dublin and Amsterdam.
But now Reuters, citing media reports in news publications WirtschaftsWoche and Handelsblatt, said Microsoft is opening two cloud data centres in Germany at a cost of more than 100m euros (£87m).
It is not clear at this stage whether these are bespoke Microsoft data centres, or new facilities opened in partnership with another party. It is also not clear whether Microsoft’s partnership with Deutsche Telekom will continue going forward.
The media reports state that demand for the German cloud had been weak because of higher pricing and a lack of flexibility in moving data.
A Microsoft spokesman reportedly declined to comment on the investment but did say it was happy to offer both German and international cloud services.
“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.