Come friendly data centers and fall on Slough
- Summary:
- Slough is fast becoming the UK's first stop for cloud services firms wanting an in-country data center as Salesforce.com follows VMware in opening up its operation there, with plans to move to France and Germany next.
The need for in-country data centers across the European Union remains a contentious requirement for US tech firms, albeit one that's more honored in the breach than the observance.
But if certain people in the European Commission get their way, there might come a time when it genuinely does become a major issue for cloud services firms who want to push into Europe, but find that post-PRISM - and with FUD being stirred up opportunistically among European customers - there's a reluctance to tap into US providers.
In reality, despite doom-mongering and armageddon-pedling from some in the US, there are very few obvious signs to date that this has been the case, although when I met him Microsoft's Kirill Tatarinov he did become the first senior executive to state that there is an impact:
“I can point to a number of clients in Europe who get concerned about data privacy in the current environment.
“Some of our prospects were looking at cloud solutions. As these news cycles escalated they chose to go on premise instead.
“People are waking up to the reality which is that you need to be very disciplined with managing data whether it’s in the cloud or on premise.”
This was followed up last week by VMware as it opened the doors to its Slough data center with the promise of similar ventures in France and Germany by the end of this year. Again, PRISM paranoia was in the air with CEO Pat Gelsinger stating that:
"Every customer is more sensitive post-Snowden."
I was also intrigued to see a briefing note from Jan Van Vonno and Philip Carter at IDC, based on their attendance at an analyst day held by Box in the UK recently, which stated that the firm's growth rate in Europe, the Middle East and Africa lags that the rest of the organization and cites specific customer comments to explain this:
European concerns around data security, privacy and residency are real, particularly in the DACH (Germany, Austria and Switzerland) region. The NSA/PRISM spying revelations in 2013, coupled with potential new EU data protection regulations, have affected organizations' willingness to adopt cloud services delivered out of the US.
Again, I have to say that I've seen no direct evidence of this myself and it wasn't something aired when I met with Box COO Dan Levin recently. Box CEO Aaron Levie has been very forthright in his views about PRISM and the NSA scandal.
Van Vonno and Carter add:
The good news is that vendors are responding to customer pressure: Box is among a number of vendors intending to deliver cloud services from European data centers in 2014 – another is Salesforce.com.
Come friendly data centers
All of which leads nicely to today's announcement from Salesforce.com that its long-promised - was it three years ago we first started talking about this? - UK data center will open its doors in August this year, also in Slough which is becoming something of a first stop destination for cloud data centers.
(For non-UK readers, Slough is close to London and best known for being (a) the bleak industrial home to the original version of Ricky Gervais' comedy The Office and (b) the subject of a 1937 poem by British poet Sir John Betjeman which urges "Come, friendly bombs, and fall on Slough! It isn't fit for humans now." You get the general idea.)
So far, so much we knew.
But what is more of a surprise is that the UK center will be followed by one in Paris, France and one in Munich, Germany next year.
While the UK center is being built by NTT, negotiations are still underway in France and Germany to sign up a provider there. But the plan is that the three new data centers will create 500 new jobs across the region by the end of 2015.
Dr Steve Garnett, Salesforce.com's EMEA president, told me:
“We do business in a large number of countries, but we don’t necessarily have a physical presence. The beauty of what we do is that we don’t need people hanging around outside the office. So we don’t need to have people in some of the smaller countries.
"But Europe is our fastest growing region. We’ve built a fantastic business here without having a data centre in the region. Now we will have three."
While Garnett is adamant that he's seen no post-PRISM impact on business, both the French and particularly the German authorities have been vocal in their disapproval of the NSA's activities.
The German government has been an enthusiastic backer of beefing up data protection laws so an in-country data center in the SAP heartland is clearly only going to be an asset to Salesforce.com's ambitions there.
The opening of the UK data centre meanwhile will be looked to to support the firm's drive into the public sector, at least in part via the national G-Cloud initiative. Salesforce.com is one of the larger US firms to be listed on the program's framework, now rolling out its fifth iteration.
It's significant perhaps that among the supporting quotes in the Salesforce.com announcement today is one from Stephen Kelly, a former colleague of Garnett's from Oracle days of yore and now the UK government's Chief Operating Officer in which role he's on the front line of reforming government computing and driving efficiencies.
Kelly's quoted as stating:
"The UK has a growing reputation as the leader in the European digital economy and we welcome this new investment.
“Within the UK Government we are driving a policy of ‘Cloud First’ to improve the way the public sector manages crucial functions, engages with citizens and delivers value for taxpayers.”
Verdict
It's been a long time coming, but finally there's a date for a UK data center from Salesforce.com and the addition of two more in-region data centers.
All of this shows commitment to further expansion in Europe on the part of Salesforce.com.
It should also flag up to Brussels that there is a willingness by the US tech sector to expand in the European Union so long as such efforts are not strangled at birth in red tape.
Disclosure: at time of writing, Salesforce.com is a premium partner of diginomica and Box is a partner.
