Out-Law News 1 min. read

US software firm to follow peers in opening new EU-based centre amid data concerns

US-based software firm NetSuite has announced plans to follow other global service providers in opening a physical data centre in Europe so that stored data can remain in the EU in compliance with European data protection laws. 

California-based NetSuite said the facility, which is expected to be opened in 2015, is aimed at European customers who wish to ensure data is retained in the EU, ZDNet reported.

According to ZDNet, NetSuite will open both a main and backup data centre in an as yet unnamed European country, “with both facilities situated within the premises of an existing infrastructure provider”.

NetSuite’s managing director for the Europe, Middle East and Africa region Mark Woodhams told ZDNet that the location of where data is held had become an increasingly important issue for three EU countries in particular.

Woodhams said: “We face challenges around data residency in Germany, Austria and Switzerland. Germany is obviously the biggest economy in Europe and so if we put a data centre in place it opens up some of those markets. Putting a data centre into Europe will generate a whole stream of new business without a doubt.”

In June 2014, Germany’s interior ministry announced plans to end the federal government's contract with the US internet services provider Verizon amid concerns over “revelations about surveillance by the US National Security Agency and its relations with US companies”.

The ministry unveiled draft legislation that would pave the way for the introduction of tough new cyber security measures to protect ‘critical infrastructure’ in the country. Measures outlined in the proposals included strengthening Germany’s federal information security office and extending the investigative powers of the federal criminal police in relation to cyber crime. Companies would also be required to report attacks by hackers.

The ministry said the proposals were in line with Germany’s ‘digital agenda’ for 2014-2017, which was approved by the federal government in August 2014. The digital agenda is a supplement to the government’s information and communication technology strategy launched in 2010 (46-page / 1.34 MB PDF).

Last month, Equinix Inc said an additional data centre that it operates in Frankfurt, Germany, could now connect privately to Amazon's cloud services in a way that the firm said satisfied German and EU data protection laws.

In September 2014 T-Systems, a subsidiary of German telecoms provider Deutsche Telekom, said it was working with US-based Cisco to develop cloud services in Europe which are as secure as data centres and meet EU and German data protection requirements.

The head of Microsoft Germany has said his company is also considering the possibility of working with partners to develop a cloud data centre based in Germany.

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