Microsoft has responded to European concerns over data privacy with the launch of Azure in a number of German data centers. Not only does the setup address data sovereignty issues, but it actually places oversight of customer information in the hands of a third party, as Microsoft notes in an official blog post:
Customer data in the two new German datacenters is managed under the control of a data trustee, T-Systems International, an independent German company and subsidiary of Deutsche Telekom. It provides additional controls for customers’ data, as access is only provided with the permission of customers, or the data trustee. Microsoft’s commercial cloud services in these new datacenters adhere to German data handling regulations and give customers additional choices of how and where data is processed.
Microsoft expects the new data centers to have appeal among customers in highly regulated industries across Germany—which is known for its strict data-protection laws—and the EU overall, and that may well be the case. It also has first-mover advantage over rival cloud providers, none of which have introduced a similar structure as the T-Systems deal, but surely will look to do so now.
The additional data centers in Germany and capacity added to the UK recently bring Azure to 30 regions, which Microsoft claims is ahead of any other cloud provider.
Initial services available on Azure include IoT Suite, SAP Azure's launch in Germany will be followed up by preview versions of Office 365 and Dynamics 365, with general availability dates for both by mid-2017, Microsoft says.
Provisions have been made for disaster recovery, with the two German centers connected by a secure network, which will ensure data remains in the country.
Microsoft's success or failure with the German data centers will be important to watch from a competitive standpoint. It could also prompt large enterprises in other parts of the world to call for similar arrangements to be made with third-party stewards in their regions.
Overall, Microsoft is striking the delicate balance of catering to European customers that want their data kept away from prying eyes—such as U.S. law enforcement agencies—while also doing big business with the U.S. government, a relationship that recently led to the creation of two dedicated Azure regions for the Department of Defense.
To that end, "now it will also be interesting to see if the German reservations with regard to public cloud have been true privacy and access concerns, or excuses," says Constellation Research VP and principal analyst Holger Mueller. "The future will tell. But Microsoft has done the right thing to put an end to it."
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