Building a National Fortress in the Cloud

When auto parts supplier Robert Bosch began offering data storage and software services to industrial customers this year, it realized that, in addition to its knowledge of machines and production, it had another advantage over tech giants such as Microsoft and Google: its nationality. “We made a conscious decision to locate the Bosch cloud in Germany,” says Stefan Assmann, head of its Connected Industry program. “It gives us a competitive edge. Many companies and consumers have security concerns.”

As German managers begin to understand the importance of cloud services, the likes of Bosch, engineering titan Siemens, cloud-infrastructure provider ProfitBricks, and Deutsche Telekom’s T-Systems unit are finding that Europe’s strict data-security and privacy laws provide a major selling point. On its website, ProfitBricks touts what it calls “100 percent German data protection,” underneath the black, red, and gold colors of the German flag. “Having a German cloud helps tremendously,” says Markus Schaffrin, an IT security expert at Eco, a lobbying group for Internet companies. “Germany has some of the most stringent data-protection laws, and cloud-service providers with domestic data centers are of course highlighting that.”