For Germany's cloud providers, it's location, location, location

Deutsche Telekom and Vodafone are touting for German cloud business with locally hosted services

German telecos are rolling out new cloud services this week to compete with those from the big U.S. providers. Their selling point is location -- though their “home grown” infrastructure is still dependent on technology from U.S. and Chinese suppliers.

Deutsche Telekom switched on its Open Telekom Cloud at the Cebit trade show in Hannover on Monday, promising to keep data in German data centers. The day before, Vodafone Germany took the wraps off a virtual private cloud service for small and midsize businesses that will begin operating from data centers near Frankfurt in June. Vodafone also revealed a new infrastructure-as-a-service platform for the enterprise that respects German data sovereignty requirements.

Where data is stored is a key issue for European Union companies, as they're required to keep certain information in its country of origin, and they face additional regulatory obstacles if they wish to move other information outside of the EU. The main selling points for cloud operators in Germany are location, location and location.

But however much these German telcos talk up their local credentials, the fact remains that they are still heavily dependent on non-European companies for the technology underlying their services.

Vodafone is working with Hewlett Packard Enterprise to build its service, called Total Cloud Flex, and said Sunday it had partnered with Virtustream on its latest enterprise offering. It's relying on a lot of U.S. expertise to prevent its customers' data from reaching the U.S.

For its part, Deutsche Telekom has turned to Huawei Technologies for the hardware and know-how to build its Open Telekom Cloud.

Huawei, of course, has been accused by some of having links to the Chinese government that make using its products a threat to the national security of Western states.

A report from a U.K. government committee giving Huawei the all-clear last year will have done little to dispel those suspicions, even though the committee was chaired by the director of the U.K. Government Communications Headquarters, the equivalent of the U.S. National Security Agency.

Some imagine that U.S. equipment providers may be as much of a threat as Chinese ones, with a bug spotted in Juniper Networks firewall code last year suspected of being a back door introduced at the request of U.S. security services.

Whatever the validity of the geopolitical arguments around cloud security and data protection, the German cloud services unveiled at Cebit must also compete on price.

Deutsche Telekom gave two examples for its Open Telekom cloud. A virtual machine running Windows server on two virtual CPUs with 2GB of RAM costs under €0.17 (US$0.19) per hour, it said, while running Open Linux on two vCPUs with 8GB of memory will cost under €0.12 ($0.13) per hour.

In comparison, Amazon Web Services charges slightly more than Deutsche Telekom for a Linux VM running in its Frankfurt data center -- and a little less than the German company for a Windows server with more memory. Its prices are lower still for servers hosted in its data center on the East coast of the U.S.

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Peter Sayer

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