Cloud Computing

Data Center: Hello Amazon Web Services. Welcome to Germany!

The analysts already wrote about it. Now the advanced but unconfirmed announcements are finally reality. Amazon Web Services (AWS) have opened a data center in Germany (region: eu-central-1). It is especially for the German market and AWS’ 11th region in the world.

Data centers in Germany are booming

These days it is fun to be a data center operator in Germany. Not only the “logistic centers of the future” are getting more and more into the focus because of the cloud and digital transformation. The big players in the IT industry also throw their grapplers more and more into the direction of German companies. After Salesforce announced its landing for March 2015 (partnership with T-Systems), Oracle and VMware followed.

Against the spread out opinion of a higher data security on German ground, these strategic decisions have nothing to do with data security for customers. A German data center on its own offers no higher data security but rather gives only the benefit to fulfill the legal requirements of the German data privacy level.

However, from a technical perspective locality is of a big importance. Due to continuous relocation of business-critical
 data, applications and processes to external cloud infrastructure, the IT-operating concepts (public, private, hybrid), as well as network architectures and connectivity strategies are significantly changing for CIOs. On the one hand, modern technology is required to provide applications in a performance-oriented, stable and secure manner; on the other hand, the location is significantly decisive for optimal “Cloud- Connectivity“. Therefore, it is important to understand that the quality of a cloud service is significantly dependent on its connectivity and the performance on the backend. A cloud service is only as good as the connectivity that provides it. Cloud-Connectivity – minor latency as well as high throughput and availability – is becoming a critical competitive advantage for cloud provider.

Now also the Amazon Web Services

Despite of concrete technical hints, AWS executives have cloaked in a mantle of secrecy. Against all denials, it is now official. AWS has opened a new region “eu-central-1” in Frankfurt. The region is based on two availability zones (two separated data center locations) and offers the whole functionality of the Amazon cloud. The new cloud region is already operational and can be used by customers. With the location in Frankfurt Amazon opens its second region in Europe (besides Ireland). This empowers the customer to build a multi-regional concept in Europe to ensure a higher availability of their virtual infrastructure from which the uptime of the applications also benefits.

Frankfurt is not an unusual selection of location for cloud providers. On the infrastructure side, the location Frankfurt am Main is the backbone of the digital business in Germany. As far as data center density and connectivity to central internet hubs are concerned, Frankfurt is the leader throughout Germany and Europe. 
The continuous relocation of data and applications to external cloud provider infrastructures made Frankfurt the stronghold for cloud computing in Europe. 

In order to help its customers to fulfill the data privacy topics as well as on the technical site (Cloud-Connectivity), Amazon took the right decision on the German data center landscape. This already happened in May this year when the partnership with NetApp for setting up hybrid cloud storage scenarios was announced.

Serious German workloads on the Amazon Cloud

A good indication for the appeal of a provider’s infrastructure is its reference customers. From the beginning AWS is focusing on startups. However, in the meantime they try everything to also attract enterprise customers. Talanx and Kärcher are already two well-known customers from the German business landscape.

The insurance company Talanx has shifted the reporting and calculation of its risk scenarios into the Amazon cloud (developed from scratch). Thereby, Talanx is able to ban its risk management out of its own data center but it is still Solvency II compliant. According to Talanx, it is achieving a time advantage as well as annual savings at a height of eight million euro. The corporation and its CIO Achim Heidebrecht are already evaluating further applications to shift into the Amazon cloud.

Kärcher is the world’s leading manufacturer of cleaning systems and is using the Internet of Things (Machine-to-Machine communication) to improve its business model. For optimizing the usage of the worldwide cleaning fleet Kärcher is using the global footprint of Amazon’s cloud infrastructure. Kärcher’s machines regularly send information into the Amazon cloud to be processed. In addition, Kärcher provides information to its worldwide partners and customers through its Amazon cloud.

Strategic vehicle: AWS Marketplace

Software AG is the first best-known traditional ISV (Independent Software Vendor) on the Amazon cloud. The popular BPM tool Aris is now available as “Aris-as-a-Service” (SaaS) and is scalable using the Amazon cloud infrastructure.

Software AG is only one example. Several German ISVs could follow. The global scalability of Amazon’s cloud infrastructure makes it an especially attractive partner, capable of delivering SaaS applications soon to target customers beyond the German market. The AWS Marketplace plays a key role in this context. AWS owns a marketplace infrastructure that ISVs can use to provide their solutions to a broad and global audience. The benefits for the ISV are in being able to:

  • Develop directly on the Amazon cloud without need for own (global) infrastructure.
  • Develop solutions “as-a-service” and distribute over the AWS Marketplace.
  • Use the popularity and scope of the marketplace.

This scenario means one thing for AWS: The cloud giant wins in any case. As long as the infrastructure resources are used the money is rolling.

Challenges of the German market

Despite their innovation, leadership public cloud provider like AWS are having hard times with German companies, especially when it comes to the powerful Mittelstand. For the Mittelstand self-service and the complex use of the cloud infrastructure are among the main reasons to avoid using the public cloud. In addition, even if it has nothing to do with the cloud, the NSA scandal has left psychological scars at German companies. Data privacy connected with US providers is the icing on the cake.

Nevertheless, AWS has carried out its duty with the data center in Frankfurt. However, to be successful in the German market there are still things left. These are:

  • Building a potent partner network to appeal to the mass of German enterprise customers.
  • Reduce the complexity by simplifying the use of the scale-out concept.
  • Strengthen the AWS Marketplace for the ease of use of scalable standard workloads and applications.
  • Increase the attractiveness for German ISVs.

By Rene Buest

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies.

Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.