Data Privacy Laws Drive Cloud Expansion Abroad

It’s not secret that cloud giants Amazon Web Services (AWS), and Microsoft have been expanding their global footprints over the past few years.
JLL, a multinational professional service firm, has just released a study that predicts an increase in this trend as cloud services demand increases worldwide.
Bo Bond, JLL’s managing Director and co-lead of datacenter solutions, stated that “The acquisition of large amounts server space in the U.S. continues, but it is not as frenetic as in 2016,” in a prepared statement last Wednesday. “Datacenter users are now focusing their attention on expanding their global datacenter footprints and making technology investments to stay ahead in an industry that is rapidly changing.”
JLL’s latest “Data Center Outlook Report” for the first half 2017 predicts that AWS and Microsoft will lease additional cloud-centric datacenter facilities abroad in response to increasing data sovereignty laws.
One such law, The General Data Protection Regulation (EU) of the European Union (GDPR), will be in effect in the EU on May 25, 2018. The GDPR, which represents the first major overhaul in 20 years of EU data privacy laws, will have an impact on how data from EU citizens are stored, managed, and protected by companies inside and outside the EU.
Both AWS and Microsoft have indicated that they are working together to ensure their respective cloud platforms comply with the GDPR. The two companies have expanded their datacenter capacity in more EU member countries, especially France and Germany, which have some the strictest data sovereignty laws in Europe (for example, both countries require that companies store citizens’ data in datacenters within their borders).
The report stated that data sovereignty is still a hot topic for many international providers. More and more government agencies continue to demand user data be stored within international boundaries, which is having profound effects on not only Fortune 1000 companies but also their go to cloud services group, providers, and operators.
According to JLL, another driver for cloud’s expansion into overseas facilities is sheer demand.
According to the report, “Demand from enterprises and hybrid adopters are also driving movement within AWS and Azure as the big players seek to globalize datacenter solutions.” Many large- and medium-sized co-location providers are now looking to get in on the growing datacenter industry by acquiring international facilities.
According to JLL, major cloud providers will lease or acquire more datacenter facilities abroad as they become more familiarized with “foreign transactions” in the second half this year.
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