Last week, Microsoft announced their collaboration with Deutsche Telekom, which was providing customers Microsoft cloud services under strict German jurisdiction, is shutting down. Microsoft is replacing it with a service that no longer is directly operated by Microsoft. The new service(s) reportedly will comply with local and regional regulations, including the Cloud Computing Compliance Controls Catalogue (C5) certification in Germany.
Handelsblatt.com called the Telekom cloud solution “over-priced, under-performing and unpopular with customers”, and their sources tell them “Microsoft Cloud Deutschland” has lost Microsoft over 100 million euro. Handelsblatt.com stated that the security issues were the main problem.
In theory, the data stored in the German data centers were run under German law which strongly prohibits access to the stored data by anyone. Not even the German government is allowed to see the stored data, according to German laws. Of course, no other government is allowed access either.
The problem is with U.S. laws as applied to U.S. companies and the fact that data stored anywhere in the world is really international. While laws in various countries may claim rights over data stored within each country, the German laws are inadequate when applied to joint ventures by corporations in different countries.