Amazon on Friday gave the biggest hint that it could expand further and deeper into Europe, as it expands its global cloud offering.
As per a report by The Wall Street Journal, senior vice president for Amazon Web Services, Andy Jassy, said the company is prioritizing where it locates its datacenters. Germany could be the latest country on deck to receive its own datacenter located "on their own soil."
You might be excused to think it's a response in the wake of the U.S. National Security Agency surveillance leaks scandal.
It's about half-right.
What's significantly more likely, as Jassy hinted, is that it's more to do with "data sovereignty requirements" — specifically knowing where your data is stored, and under which legal jurisdiction.
That's a major proponent of the new European data protection and privacy legislation that's currently going through the European Parliament, which sped up in the wake of the Edward Snowden leaks.
There's no doubt there's a push-pull effect going on here, but it's not the be-all and end-all by a long shot.
Amazon currently serves 10 geographical regions — including both U.S. coasts, Dublin, Singapore, Tokyo, Sydney, and China — which allows customers to pick their region of choice, and therefore legal jurisdiction to a greater or lesser extent.
There is a slight problem with that, though.
There are two points worth noting. Let's not forget that the U.S. authorities can spy on EU cloud data, and under U.S. law, the U.S. government has that right — even if under international law it does not. When you're the world's foremost superpower, who cares — right?
And secondly, the Electronic Frontier Foundation says Amazon may not encrypt the fiber cables that connect its datacenters. That means any Amazon datacenter in Europe may very well be vulnerable to NSA's data vacuums, particularly MUSCULAR, which allows the U.S. and U.K. to tap into those private networks.
Counter-surveillance is likely not very high on Amazon's list. With it being a U.S.-headquarter company, and NSA programs notwithstanding, the U.S. Justice Dept. can always serve it a court order that requires it hands over data wherever it's stored in the world.
Despite this, there are good business reasons for Amazon to builds its European network around Germany. Because the country's privacy rules allows it to play hardball with the rest of the world.
Germany is a strong advocate of privacy — not least due to its not-so-recent history that spurred on a national distrust of nationwide and global surveillance machines — and as a result is one of the more privacy-conscious and aware nations in the world. It's also one of the very few countries that took the original European privacy laws, ratified in 1997, as a benchmark and bolstered them considerably. For instance, Germany doesn't recognize the EU-U.S. Safe Harbor requirements like other EU nations, forcing German companies using U.S. cloud providers must take further measures to remain compliant.
And that's where Amazon steps in. Because its cloud business, according to the Journal's citations, could be far stronger in the country. And if it expands to Germany, it not only serves the burgeoning German IT industry, but it can also take in surrounding nation state's business as their laws are somewhat weaker.
It makes sense for Amazon to set up shop in the strongest state for data protection and privacy, and serve the surrounding country's customer base with that high level of privacy awareness.
Amazon needs European business. Yes, to many, the idea of talking about Brussels-based bureaucrats and European trade and investment may be about as interesting as a conversation with said bureaucrats — with all due respect to them. But the reality is that's Europe has the capital, the spending, the desire to expand technologically, and frankly where the population and customer base is.
And crucially, Germans being the more privacy conscious states in the G20, the country's businesses want an in-country solution to their cloud problems — particularly, but not exclusively, as a result of the U.S.' extraterritorial sticky fingers.